Buffett’s leaked personal trades conflict with Berkshire Hathaway’s policies and his own personal statements.
This story was originally published by ProPublica. ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.
It was the kind of endorsement most companies dream of. Berkshire Hathaway CEO Warren Buffett, the legendary investor known as the Oracle of Omaha, repeatedly sang the praises of Wells Fargo in an interview with Fortune. The bank, Buffett said, “has come closer” to an effective business model “than any other big bank by some margin.” He detailed the ways in which Wells Fargo was more valuable than it seemed and compared its chair to Walmart founder Sam Walton.
The interview was published on April 20, 2009. Banks were still reeling from the financial crisis, stock markets were turbulent, and Buffett was the kindly white-haired billionaire who had assured Wall Street, the U.S. government and the public that America would be just fine. It was Buffett who had proposed the idea that turned into the $250 billion federal bailout that had propped up America’s banks (including Wells Fargo).
Berkshire was already one of Wells Fargo’s largest shareholders, and Buffett was so influential that, Fortune noted, he had “caused a 20%-plus jump in Wells shares” the previous month “simply by expressing confidence in the bank on TV.” After the Fortune interview appeared, a similar pattern ensued: Buffett’s comments rippled across financial media, eagerly lapped up by the legion of investing fans who followed his every move. By April 24, Wells Fargo shares had jumped 13%.
That day, Buffett privately sold off $20 million worth of Wells Fargo shares in his personal account.
It has long been known that Buffett keeps a personal stock portfolio, separate from his company’s holdings. But what’s inside of it has always been a closely guarded secret. Buffett’s hand-picked biographer, Alice Schroeder, told ProPublica that he gave her access to nearly everyone and everything in his life — except his personal investing records.