Thursday, May 07, 2009

Buffett's Free Pass

I was intrigued by two articles this morning reviewing the Buffett/Berkshire (BRK) shindig over the weekend by Doug Kass and David Morrow.

Both point out that Buffett gets a free pass at these get-togethers over the years (as well as from the press in general). Neither says this out of malice. They are stating fact.
Buffett himself did not conjure this reality up. He has simply done his job over the years with his colleagues at Berkshire and is living with the widespread media interest around him and the firm.

Yet if we've learned anything from the last year, it's that investors and the media need to do a much better job at being skeptical of conventional wisdom, of not being afraid to skewer a few sacred cows here and there.

I recall in 2004 the tempest in a teapot over whether Buffett should continue to serve on Coke's (KO) board of directors because he was on the audit committee who authorized their auditors at the time do some non-audit work. There were howls at the time against CalPERS and others who supported Buffett's removal from the board. The counterargument went something like: "It's Warren Buffett. How could you possibly oppose his re-election?" That's not a fair argument in my view.

I'm not suggesting a smear job of Buffett or Berkshire, or that he shouldn't have been re-elected to KO's board. I'm suggesting we not worship false idols. I'm suggesting we ask tough questions when they deserve to be asked, no matter who's being put on the spot to answer them. When there are legitimate questions to ask, investors and the press should ask them. The press shouldn't be afraid of losing their access to future interviews.

No one deserves a free pass after what we've witnessed in the last 18 months in the capital markets -- and Warren Buffett would be the first to agree.

Position: None.

Originally published in on 5/4/2009 9:34 AM EDT

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