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Investing Warren Buffett Watch

  Friday, 1 Apr 2011 | 9:30 AM ET

Yoshikami: Why Warren is Challenged Finding the Next Buffett

The sudden resignation of David Sokol, widely considered by many to be the heir apparent to the 80-year old Warren Buffet, is clouded in controversy and perceived conflicts of interest. It has left investors shocked and confused. It has also highlighted the huge challenge facing Berkshire Hathaway – how to find the next Buffet. This task is clearly no easy pursuit.

If you listen carefully to the compelling interview Becky Quick and Joe Kernan conducted with Sokol on Thursday , it would appear that Sokol resigned simply because he didn’t want the job. In the interview, Sokol said that he is a "builder of companies" and that is what he enjoys doing.

According to Sokol, the role of CEO of Berkshire simply did not fit the vision of what he wants his future to be. It's the same story with Li Liu who also withdrew from CEO consideration. Both Sokol and Liu passed on being the next Buffett.

This episode has once again raised questions regarding Buffet’s succession strategy. Frankly, we all know Buffett is a tough act to follow. It will clearly be a monumental task to take over from this investment legend. What is evident is that the future leader of Berkshire Hathaway must be a brilliant analyst but, at the same time, a broad theme visionary. And it would seem that the desire to be a CEO ("a builder of companies") should be secondary to the desire to be a great investor.

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  Friday, 1 Apr 2011 | 12:11 AM ET

CNBC TRANSCRIPT:  David Sokol Defends His Controversial Lubrizol Stock Purchases

Posted ByAlex Crippen
  Thursday, 31 Mar 2011 | 12:17 PM ET

Sokol Resignation is a 'Question of Appearance': Morgan Stanley Exec

Posted ByGennine Kelly

The surprise resignation of leading Warren Buffet successor , David Sokol, raised many unanswered questions on Thursday over shares he bought of Lubrizol before Berkshire Hathaway announced its $9 billion acquisition of the company on March 14. But ultimately, it's more of a question of appearance rather than legal liability, according to the vice chairman of Morgan Stanley.

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  Thursday, 31 Mar 2011 | 9:13 AM ET

Sokol to CNBC: I Shouldn't Have Told Buffett I Liked Lubrizol

Posted ByAlex Crippen
David Sokol on Squawk Box
CNBC
David Sokol on Squawk Box

Repeatedly insisting that he did nothing wrong, David Sokol tells CNBC that looking back in light of widespread criticism, he still would have bought shares in Lubrizol, but wouldn't have told Warren Buffett anything about the company, including his belief that it would be a good acquisition for Berkshire Hathaway.

Last night's news release announcing Sokol's surprise resignation as one of Berkshire's top executives included several paragraphs on Sokol's purchase of Lubrizol stock before he recommended it to Buffett as a potential acquisition.

Berkshire ultimately did buy the company for $9 billion earlier this month, sending its stock higher and increasing the value of Sokol's holdings by around $3 million.

That has many on Wall Street asking if Sokol did something improper, if not illegal.

During a live, exclusive interview this morning on CNBC's Squawk Box, Becky Quick asked him, "If you had to do it over, seeing the hoopla that's broken out, if you had to do it over, would you change your mind on it?"

Sokol's reply:

"Knowing today what I know, what I would do differently is I just would never have mentioned it to Warren, and just made my own investment and left it alone. I think that's a disservice to Berkshire, but if that's what people want to do in the future, that's fine. You can't, or at least I don't think you can, ask executives to not invest their own family's capital in a company that Berkshire had no interest, or even knowledge of, and somehow police that. The only thing you can do is just say if you invest your own money, don't ever mention it to anybody at Berkshire. That doesn't make sense to me either, but that's certainly what it sounds like."

During the interview, Sokol said he had no special insider knowledge, and never does. He didn't think Buffett would actually be interested in buying Lubrizol, and had no role at all in Berkshire's decision-making process on acquisitions and investments.

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  Thursday, 31 Mar 2011 | 9:12 AM ET

Warren Buffett, Media Master

Posted ByBob Pisani

Managers of media crises, take note: Buffett is the master.

How smart is Warren Buffett? This man should give a master class in media management.

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  Thursday, 31 Mar 2011 | 7:36 AM ET

LIVE BLOG - David Sokol's Live Interview on CNBC's Squawk Box

Posted ByAlex Crippen
110331_SokolBlog.jpg

This is a live blog of David Sokol's exclusive interview on CNBC's Squawk Box.

He is discussing his surprise resignation as a top Berkshire executive and the revelation that he personally bought shares in Lubrizol before recommending to Warren Buffett that Berkshire Hathaway buy the company.

Sokol had been widely seen as the leading candidate to eventually succeed Buffett as Berkshire's CEO.

All times are Eastern.

8:11 AM: The interview ends with Sokol wishing his granddaughter Lucy a happy birthday.

8:10 AM: Q. In retrospect, given the reaction, would you have done anything differently? A. Looking back, I would not have mentioned the company to Buffett, but would still have bought the Lubrizol stock. "That would be a disservice" to Berkshire, "but if that's what people want to do in the future, that's fine." Sokol doesn't think you can ask executives to not invest their own family's capital in a company that Berkshire had no interest, or even knowledge of, and somehow police that. The only thing you could do is just say if you invest your own money, don't ever mention it to anyone at Berkshire, and that doesn't make sense to me either."

SOKOL TO CNBC: I SHOULDN'T HAVE TOLD BUFFETT I LIKED LUBRIZOL

8:09 AM: "19 out of 20 times when we even have a conversation" with a potential acquisition, nothing happens. The Lubrizol deal came together very quickly and was a surprise to him.

8:08 AM: Asked in Buffett will need to tighten internal control at Berkshire to address the press "hoopla," Sokol says he doesn't think Berkshire needs to take any actions.

8:06 AM: Joe notes that Berkshire has a "squeaky clean" reputation and suggests Buffett might have decided to accept Sokol's resignation this time because he was concerned about how the Lubrizol stick buys might affect that reputation. Sokol says Buffett himself would have to say what prompted him to accept the resignation this time.

8:06 AM: Sokol felt the management in place at NetJets had demonstrated it could run the company well.

8:05 AM: Sokol says he felt it was the right time to step down because NetJets could continue to do well without him.

8:04 AM: Sokol says he never got any response from Berkshire after giving Hamburg details of his Lubrizol stock purchases.

8:04 AM: Sokol says it would be an entirely different situation if his company, Mid-American, was looking at a company and he was involved in the decision.

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  Wednesday, 30 Mar 2011 | 7:45 PM ET

Surprise Resignation of Leading Buffett Successor Raises Unanswered Questions

Posted ByAlex Crippen
David Sokol
David Sokol

In an "unusual," to say the least, news release tonight, Warren Buffett announced the sudden resignation of David Sokol, the Berkshire Hathaway executive who had been widely expected to eventually succeed Buffett as Berkshire's CEO.

Why? Sokol wants to "create enduring equity value and hopefully an enterprise which will provide opportunity for my descendents and funding for my philanthropic interests."

But that's not all.

In the release, which Buffett says he's written "almost as if it were a letter," he also recounts at some length how Sokol had bought shares of Lubrizol before Berkshire announced its $9 billion acquisition of the company on March 14.

Buffett first heard from Sokol that he owned Lubrizol shares two months ago, and "learned" details of the puchases (and a sale) just before he left for Asia less than two weeks ago.

Yet Buffett writes he didn't ask for Sokol's resignation and it came as a "total surprise" when Sokol's resignation letter arrived Monday afternoon, delivered by Sokol's assistant.

And he writes explicitly, "Neither Dave nor I feel his Lubrizol purchases were in any way unlawful. He has told me that they were not a factor in his decision to resign."

That raises the question: If the Lubrizol stock buys aren't behind Sokol's resignation, why did Buffett include the narrative?

It sounds like a pre-emptive "get it all out there" disclosure that's meant to blunt reaction to negative news by telling the entire story the way you see it right away, before it trickles out through insinuating news reports.

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  Wednesday, 30 Mar 2011 | 6:24 PM ET

Tilson: Should Street Overreact to Resignation, Berkshire a ‘Buy’

Posted ByLee Brodie

If shares of Berkshire Hathaway sell-off more than 1% in the wake of the recent surprise developments, top hedge fund manager Whitney Tilson of T2 partners tells CNBC's Fast Money that the stock is a buy.

And Tilson may get a chance to put his money where his mouth is.

On Wednesday, shares of Berkshire slipped about 2% in extended trade as investors tried to make sense of reports that David Sokol, a top Berkshire executive, had suddenly stepped down.

To make matters all the more disconcerting Sokol was believed to be on the inside track to succeed Warren Buffett, one day.

Buffett said Wednesday that he received David Sokol's resignation letter late Monday, and noted that it came as a surprise.

Also, Buffett said he learned earlier this month that Sokol bought nearly 100,000 shares of Lubrizol stock before recommending that Berkshire buy the chemical company.

However, Buffett said he doesn't believe those stock purchases were illegal, and didn't ask Sokol to resign. Buffett said Sokol, who had been serving as chairman of Berkshire's MidAmerican Energy, NetJets and Johns Manville units, indicated that he wants to spend more time on philanthropy.

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  Monday, 28 Mar 2011 | 11:09 AM ET

The Warren Buffett And Anne Hathaway Trade

Anne Hathaway and Warren Buffett
Getty Images
Anne Hathaway and Warren Buffett

Anne Hathaway and Warren Buffett have recently been linked in the media—though not romantically, thank god.

No, this linkage is purely statistical.

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  Thursday, 24 Mar 2011 | 10:07 AM ET

Euro's Collapse Is Not 'Unthinkable': Warren Buffett

Posted ByMia Lamar

Warren Buffett told CNBC Thursday that the collapse of the euro zone's single currency is far from "unthinkable."

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About Buffett Watch

  • Warren Buffett is arguably America’s most-admired and most-followed investor. Buffett is the largest shareholder and CEO of Berkshire Hathaway and one of the world’s most famous and most generous philanthropists. Legions of investors - from all walks of life - follow Buffett's homespun investment philosophy: invest in what you know, invest in value. Here on CNBC.com's Warren Buffett Watch, we’ll keep you up to date on what the “Oracle of Omaha” is doing by following Buffett's trades, words and deeds.