Interesting Reuters article on Warren Buffett cutting back on his PetroChina stake. Even Ray Charles could see it makes sense to take profits in this stock, especially since its a Chinese company. And I love this part:
But activists say the sale of 93 million shares by his Berkshire Hathaway Inc also showed the prominent U.S. investor had been swayed by human rights groups who have flagged PetroChina's parent's ties to Sudan.
Bull. Anyone who saw Buffett's appearance on Charlie Rose back in May knows the concerns of "activist" had zero impact on his decisions regarding the company. World Savers and Do Gooders live on donated money -- and they need to claim "victories" to keep the fundraising machine going.
For now, Berkshire remains the largest foreign shareholder in PetroChina, with roughly $3 billion invested.
Buffett might sell more. He may already have. But it will be because he no longer sees the company as a value, or thinks the Chinese market is an insane bubble to be avoided at all costs. Or almost anything. Yet we can rest assured he doesn't think the profits Berkshire's collecting are ill gotten gains.
Clearly Buffett didn't take a political stance. Ignoring the fact that he disagrees that he is responsible for the Sudan problem, the fact that he only sold a small portion means that this is driven by some other motive. If one took a political stance against the company, he/she would sell the whole stake.
Posted by: Sivaram Velauthapillai | September 13, 2007 at 11:31 AM
If one wanted to take a stance against this Sudan issue, considering the close ties of the mega cap Chinese stocks with their gov't, wouldn't one have to boycott buying all Chinese goods? Try that next time you walk through the grocery story or Target/Walmart.
I have seen quite a few stories claiming its the Sudan, as the reason but they neglet to mention he dropped down his % ownership from just over 10% to just under 10% - not a huge drop in fact.
Posted by: TraderMark | September 13, 2007 at 03:39 PM
I have been searching for and reading various blogs hoping to find suitable ones to link to in my blog. I especially have come to like yours. I was wondering if you would like to exchange links.
Dereck
Posted by: Dereck Coatney | September 13, 2007 at 09:06 PM
Sivaram: Yep. He'd sell the entire stake and give the money to charity. I wish I could recall what he said on the Charlie Rose Show on PBS about PetroChina and Sudan. Maybe I'll try to locate the transcript later.
TraderMark: Good points.
Dereck: I don't do link exchanges. My advice is to just blog and you'll be surprised how many people will link to you on their own. Good luck.
Posted by: John | September 14, 2007 at 12:02 AM
Buffett interview: Your wish is my command.
http://www.charlierose.com/shows/2007/05/10/1/an-exclusive-conversation-with-warren-buffett
I remembered that the video link was included in one of our past "Features of the week" posts.
Posted by: David | September 14, 2007 at 02:04 PM
David: Thanks!
Posted by: John | September 14, 2007 at 03:01 PM