During a recent conversation with CNBC, Charlie Munger, the 99-year-old vice chairman of Berkshire Hathaway, strongly rejected allegations suggesting that Warren Buffett participated in personal stock trading before the conglomerate made similar moves in the same securities. Munger vigorously upheld Buffett’s integrity, rejecting the idea of Buffett engaging in front-running Berkshire’s trades as unlikely and emphasizing that Buffett would not partake in actions considered ethically questionable for personal enrichment.
The controversy arose from a November 9 report by investigative journalism non-profit ProPublica, alleging that Buffett executed personal stock trades on at least three occasions shortly before or during the same quarter that Berkshire Hathaway made similar moves. The report, citing leaked U.S. Internal Revenue Service data, claimed that Buffett gained at least $466 million from these personal stock sales between 2000 and 2019.
Munger, a long-time business partner and confidant of Buffett, vociferously challenged the accusations during the CNBC interview. He expressed strong disbelief in the idea that Buffett would compromise his integrity and emphasized Buffett’s unwavering commitment to Berkshire’s well-being over personal financial gain. Munger underscored the philanthropic aspect of Buffett’s giving, stating, “He cares more about what happens to Berkshire than he cares what happens to his own money. He gave all his own money away. He doesn’t even have it anymore.”
ProPublica’s report revealed that Buffett’s personal stock sales from 2000 to 2019 constituted a fraction of his overall net worth. As of August, Buffett’s securities filing disclosed ownership of over 200,000 Berkshire Hathaway A shares, valued at more than $100 billion. This information underscores the relatively small scale of Buffett’s personal trades in comparison to his extensive holdings within Berkshire.
As the controversy unfolds, investors and financial analysts eagerly await further clarification from Buffett himself. The steadfast defense from Charlie Munger adds an important perspective, highlighting Buffett’s commitment to Berkshire Hathaway’s principles and the improbable scenario of personal gain through trading practices.