Warren Buffett: Losing the bishop to protect the Queen

March 31, 2011 at 1:54 pm 1 comment

I applaud Warren Buffett latest stern action to allow David Sokol to resign after problem of conflict of interest in recommending Berkshire to buy shares of Lubrizol which he owned.

Warren has said it takes years to build up reputation but days to ruin it. By letting go of David Sokol, a potential successor and accomplished CEO plus deal maker, it is a tough but necessary decision to make if Warren and David intend to not let their painstaking-built reputations go to ruin.

I feel that David did not intend to benefit from this buy recommendation as the amount he earned from the rise in share price is less than what he would earn as a CEO.

He probably let his enthusiam for the company blind him to the fact that he owns shares of the company and that could pose a problem of conflict of interest.

Entry filed under: Investing. Tags: .

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1 Comment Add your own

  • 1. jack  |  May 27, 2011 at 11:42 am

    Hi,

    I like your post. I will be following your post often. I sincerely invite you to join my blog – http://www.jackphanginvestment.com.

    Have a nice day.

    Regards,
    Jack

    Reply

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