Billionaire investor Warren Buffett cringes at the idea of revealing the huge stock positions he buys and sells for Berkshire Hathaway Inc.
Since the 1970s, he has managed to hide some of his Omaha-based holding company’s trading secrets with help from federal regulators who routinely approved his requests to seal portions of quarterly filing reports. But the Securities and Exchange Commission has adopted a policy that states “information must be promptly disseminated to the public,” and requests for exemptions will be scrutinized.
People familiar with Buffett say he simply wants to secure the best prices when buying or selling large quantities of stock without being shadowed by other investors. But critics say he should be forced to follow rules that help small players monitor what the big guys are doing.
On Feb. 8, the SEC released filings showing Buffett cut Berkshire’s stake in Walt Disney Co. by 80 percent in late 1999 and early 2000, and reduced its position in steelmaker Nucor Corp. by 62 percent during the same period.
That filing had been denied confidentiality by the SEC in August. But Buffett appealed the ruling, and in doing so managed to keep the information secret for another five months.
Buffett is also trying to keep secret portions of Berkshire reports for the quarters that ended in June 2000 and September 2000.
Making the filings public could benefit investors who try to copy Berkshire’s strategies, but don’t want or can’t afford to buy its Class A stock, which traded near $70,000 a share Friday.
Many investors, from large money managers to day traders, “live and die for what Buffett is doing,” said Ronald Hill, investment strategist at Brown Brothers Harriman & Co.
In November, shares of Chicago-based USG Corp. jumped nearly 30 percent in a day when it was revealed that Buffett acquired a 15 percent stake in the building products company.
Congress decided in 1975 that money managers with holdings of $100 million or more must file quarterly SEC reports to disclose the contents of their portfolios. Those reports could be kept secret only if managers proved that disclosure would hurt them financially.
