Warren Buffett Privately Traded Stocks Berkshire Hathaway Was Buying and Selling

https://www.propublica.org/article/warren-buffett-privately-traded-stocks-berkshire-hathaway-ethics-irs

by pinewurst • 3 years ago

55 47 3 years ago

nullc4• 3 years ago

It's astounding to me how there is utter silence about the fact that propublica (and god knows who else) got their hands on the detailed tax records of every person in America... likely the biggest data breach in history, certainly the biggest government breach of private information about the public-- and over material that has some of the strongest legal protection: unlike a lot of our other private data it's a felony to print/republish tax return information without authorization.

But I guess possessing that kind of info confers a degree of immunity from criticism, after all-- anyone of impact who asks too many is at risk of having their own records scrutinized.

htss20132• 3 years ago

Is there confirmation it's data on all Americans? I read it as Buffet's records were leaked.

nullc4• 3 years ago

I read it as Buffet's records were leaked.

No, propublica has had a series of 50 or so articles since mid 2021 each covering the private tax records of varrious parties.

actuallyalys2• 3 years ago

As far as I know, ProPublica has never said it received tax information on every American, just the wealthiest. So I'm not sure it's the largest breach in history. Still, it does seem like the leak is a story in itself.

For what it's worth, here's their ethical justification:

Many will ask about the ethics of publishing such private data. We are doing so — quite selectively and carefully — because we believe it serves the public interest in fundamental ways, allowing readers to see patterns that were until now hidden. [0]

And their legal justification:

A federal law ostensibly makes it a criminal offense to disclose tax return information. But we do not believe that law would be constitutional if applied to bar or sanction publication of a story in the public interest when the news organization did not itself remove the information from the control of the IRS or solicit anyone else to do so — as we did not. [0]

They also note that tax records are public in certain jurisdictions, including in Sweden, Norway, and the state of Wisconsin.

[0] https://www.propublica.org/article/why-we-are-publishing-the...

nullc4• 3 years ago

They've confirmed it essentially by listing about the hundred or so parties that used to validate the information-- including their own staff, politicians, etc. It's certainly not just material on the "wealthiest" Americans, though that's one of the ways they've limited their reporting in order to argue a public interest angle.

I think the ethics of their coverage is complicated at best, but it's also orthogonal to the fact that the leaker committed a serious felony and that the government has failed to protect information which it is obligated to protect. This is a serious breach of our trust and security and deserves inquiry regardless of where you stand on ProPublica's subsequent usage. (particularly given the earlier rumors that the leaks were by someone in the Biden administration as an effort to promote the administrations proposed tax reforms, which it seemed suspiciously well timed to do)

But as far as their usage goes-- many of the articles seem like this one: grinding thorough huge amounts of data to pick out a slightly suspicious piece of straw in a huge haystack and highly speculative-- by no means a smoking gun due to the limitation of the tax records and the general absence of other forms of investigation. Is this specific article a matter of general public interest enough to justify the felony invasion of tax records? I don't agree that it is. Even if their speculative allegations were true here, it sounds de minimis and not of particular public concern.

They also note that tax records are public in certain jurisdictions, including in Sweden, Norway,

Yes, and not in the US. Where they are public there are differences in what gets reported and other rules governing the use of the information that mitigate harm, simply knowing that it will be public offsets part of it.

pharrington• 3 years ago

propublica (and god knows who else) got their hands on the detailed tax records of every person in America

Do not lie.

blibble• 3 years ago

if he's a prolific trader then three times over that sort of time period could easily be innocent mistakes

BobaFloutist• 3 years ago

Honestly if anything it's suspiciously infrequent.

As in the best takeaway is that he's deliberately avoiding matching their trades, even when it's a good idea.

pests• 3 years ago

He has stated he does such. Which is why some people are upset, apparently.

Rastonbury• 3 years ago

What's he gonna do anyway fire himself?

It doesn't even have to be a mistake. Imagine I have a large investment firm, I make investment decisions in this firm. I own Johnson and Johnson shares both at my firm and personally, I decide J&J is no longer a good investment. I decide to sell both but personal obviously first because when the firm starts offloading, the price will fall at Berkshire trade sizes. I do not have a conflict on interest because they are basically the same interest and investment to me.

But as a boss, what I do care about is my employees clouding their judgement because their personal stakes and that of my company are in conflict. Warren doesn't have that conflict because of how much of Berkshire he owns

Honestly it may be even worse if he doesn't follow his company, investors in berkshire would wonder, why the hell are they selling but Warren still holding, are his employees worse than him?

JoeAltmaier3• 3 years ago

Ok. So he should do what? Give the money back? Clear up this misunderstanding.

lkjlkjsdfsadf• 3 years ago

Holy clickbait hit piece. Pro Publica took 2 decades of leaked records and found 1 trade trade where he sold before Berkshire sold and 1 trade where he bought while Berkshire bought. This all totaled in less than $100 million, 0.1% of Buffet's current net worth.

This is just p-hacking. They have such a glut of data and so little context that they're going to find suspicious-looking things.

* The article also mentions he sold some Wells Fargo shares from his personal account after its price rose 20%. According to a Fortune article from April, 2009, Buffett's TV comments on Wells Fargo made the price raise. The article apparently wants you to draw the conclusion that Buffett pumped the stock on TV so he could sell at a profit.

epolanski3• 3 years ago

I don't find even a hint of a clickbait.

Man has preached against insider trading for decades, he himself condemned such activities, he himself encoded the rules.

He still broke those.

As someone who's always thought of Buffet as sort of a role model, it is a sad to see this happen. I have seen him speak and preach about those just too much just to find out it was simply not true.

He even made a specific example about not owning Wells Fargo in his personal portfolio and..he did.

I can't understand people excusing him, a lie is a lie, no matter how harmless and casts a huge shadow on his reputation, integrity and trustability.

I don't even understand the point of having a personal portfolio. It's not illegal or anything. But it's just..odd.

It's really baffling how many people jump on the ship of underplaying this, especially with someone like Buffet who's built his personal brand on condemning such a lack of transparency.

jollofricepeas5• 3 years ago

Agreed.

This piece demonstrates that Buffet is human.

AND…

It took a lot of courage by ProPublica to put out this piece knowing they would deal with the wrath of the Buffet faithful. No one had any issues when they were reporting on Clarence Thomas.

Unfortunately there is quite the cult-like mentality around Buffet. He is worshipped by many who fail to see that while gifted he is no different than any other human.

By this I mean he is capable of trading on personal benefit, fear, avarice and ignorance just like any other human being.

aeternum• 3 years ago

Maybe he had Wells in his personal portfolio for awhile, realized it, and then sold. If you look at the chart, it wasn't a particularly good time to sell.

The trades that Congress continually make are much more suspect. I don't understand why there's not more focus on those trades where there is blatant corruption.

yumbrand• 3 years ago

I don't think this is insider trading? Perhaps he benefits from the market flows but none of this is material non public information.

yunohn• 3 years ago

This all totaled in less than $100 million, 0.1% of Buffet's current net worth.

But also more money than entire families and generations will ever see.

JoeAltmaier3• 3 years ago

SO here's how he can clear his reputation: give the money back.

Rebelgecko3• 3 years ago

To who?

nullc4• 3 years ago

it raises the question of why Buffett made one choice for his own portfolio and the opposite choice for Berkshire’s investors

You can't actually determine that from tax returns. For all you can tell from returns the transaction could have been intended to trigger taxes or to change allocations between account types (e.g. to move a position from a taxable account to an IRA), and was matched by another transaction that preserved the position.

Similarly, you can't tell if the timing was controlled by the tax payer or if it was some long-set-in-advance programmatic trade (it's also pretty hard to tell if it was triggered by a derivatives contract). AFAICT the article also makes no effort to establish he was personally aware of BRK's plans in those securities, which would be a necessary condition for a potential conflict.

Perhaps there is substance here but if he was engaging in crooked trading you would expect to see a systematic pattern of it, not two isolated trades that didn't even appear to produce an outsized benefit for him.

Tax information is as easily misleading as it is revealing.

dfps• 3 years ago

Buffet has a long resume.

BenFranklin100• 3 years ago

I used to respect Propublica. It would regularly have interesting reporting not found elsewhere. It’s deteriorated to the level of Jacobin, featuring inconsequential puff hit pieces like this, while paying scant attention to larger issues of systemic inequality like zoning.

jollofricepeas5• 3 years ago

I disagree.

In this time of tremendous wealth inequality, I welcome their in-depth reporting that holds the powerful accountable regardless of what side of the political sphere they sit.

ProPublica is demonstrating that they will report on both liberals and conservatives.

…on Republican chief justices and “progressive” billionaires.

We need more journalism of this type not less of it.

rapsin4• 3 years ago

The amount of money buffet made from that trade is literally like $100 to you and me. It's laughable, what journalism is today, literally zero integrity. Buffet is one of the good guys...

This is why no one cares about journalists anymore too many purposely misleading pieces trying to force some kind of narrative.

astrange3• 3 years ago

Income inequality in the US has not increased since 2014 via Piketty's methodology (the one most people use), but also hasn't increased since the 60s by other ones. It's also gotten better since 2019 because low end wages have dramatically improved.

https://x.com/jon_hartley_/status/1720510613775118690

Wealth inequality is largely (not entirely) illusionary since it's mostly based on the marginal price of stocks. Bezos has billions in Amazon shares, so theoretically he could sell them for billions in cash, but the only reason they're worth billions is investors know he will never do that.

(However, since he lost half his fortune by cheating on his wife, we can see how many billions he values Latina news anchors at.)

boeingUH602• 3 years ago

Clickbait trash for outraged gullible people.

A few trades out of decades of trading records is likely just a mistake. If Buffett wanted to front Berkshire trades, he would’ve done that many times and no one would have stopped him.

Shame on clickbait journalists like this..

jollofricepeas5• 3 years ago

Actually…

It took a lot of courage by ProPublica to put out this piece knowing they would deal with the wrath of the Buffet faithful.

No one had any issues when they were reporting on Clarence Thomas.

Considering the power that Buffet wields in the marketplace, he and his followers should welcome inspection, reporting and oversight in the same way that chief justices should.

The irony is deafening.

boeingUH602• 3 years ago

It doesn’t take courage to put out dumb clickbait. I’m not “Buffett faithful” or whatever…just a layman who can recognize and call out dumb clickbait when it relates to the financial markets.

Rebelgecko3• 3 years ago

Is this a copypasta? I swear I've read this before verbatim

happytiger• 3 years ago

Really look forward to hearing what Warren has to say about it.

Until then I’ll withhold judgement.

I don’t believe convictions are the jurisdiction of news organizations.

Obscurity43402• 3 years ago

Is Buffett likely to respond to this piece? I hope it can be sufficiently explained and contextualized but I would love if Buffett took on Congress and stopped the bullshit that is the very prevalent insider trading that occurs with members constantly. One of the few actual grievances I think is legitimate with respect to the Pelosis. Sketchy as fuck

tinus_hn• 3 years ago

I would have expected the piece to have a response or at least a line indicating Buffett chose not to respond. Poor journalism form.

Obscurity43402• 3 years ago

He certainly seems to be subject to a buffett of criticisms

johnwheeler• 3 years ago

If Warren Buffett did not give all his money away, he would be the richest person in the world. He’d be richer than Elon Musk right now.

Warren Buffett Privately Traded Stocks Berkshire Hathaway Was Buying and Selling

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