MarketFoolery: 03.31.2011
MarketFoolery
The Motley Fool
4.7 • 1.7K Ratings
🗓️ 31 March 2011
⏱️ 12 minutes
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Summary
David Sokol, once considered a possible successor to Warren Buffett, resigns following revelations that he bought $10 million in shares of Lubrizol just days before he recommended that Buffett buy the company. Is there another shoe to drop? How much damage has been done to Buffett’s and Berkshire’s reputation? What does the news mean for the Lubrizol deal? Who is the likely successor to Buffett now? Our analysts answer those questions and weigh in with their reactions.
Transcript
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| 0:00.0 | It's Thursday, March 31st, and this is Market Fullery. |
| 0:05.0 | I'm Chris Ellen joining me in studio today from Motley Fool Asset Management, Bill Mann, |
| 0:09.0 | from Inside Value, Joe Maker, and from Motley Cool Global Gaines, Tim Hanson. |
| 0:14.2 | Guys, good to see you. |
| 0:15.4 | Hey Chris. |
| 0:16.4 | Howdy. |
| 0:17.4 | The one big story we've got today is really the lead story in most business publications, |
| 0:22.2 | and that is that David Sockel, longtime |
| 0:24.3 | lieutenant of Warren Buffett and considered a possible successor as CEO of |
| 0:28.8 | Berkshire Hathaway, has resigned. This was disclosed by Buffett himself in a letter released to the public yesterday. |
| 0:35.0 | Also in the letter was the revelation that David Sockel had bought shares of Lubrizol, the chemical company |
| 0:41.6 | Berkshire Hathaway just bought for $9 billion. So guys are a lot of different story lines here. I want to get your general reaction in a minute, but let me just lay out the timeline for folks here. |
| 0:52.3 | December 13th, the Socol Meets Let me just lay out the timeline for folks here. |
| 0:52.6 | December 13th, the Sokol meets with Citi |
| 0:56.0 | to discuss potential deals for 18 companies |
| 0:59.2 | and Lubrizol is the only one |
| 1:01.1 | that Sokol finds interesting. |
| 1:03.1 | The next day, December 14th, he buys 2,300 shares. |
| 1:06.6 | A week later, he sells those shares of Lubrizol for virtually no profit. |
| 1:12.0 | Now we fast forward to January 5th, 6th, and 7th. Over that three days, |
| 1:17.0 | Sockel buys 96,000 shares of Lubrizol. About 10 days later, he pitches the Lubrizol deal to |
| 1:24.0 | Buffett and March 13th the Berkshire board votes to buy Lubrizol for |
... |
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