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SEC Filings Give a Investors Quicker Peek
At Buffett's Investments

By Alan Clendenning   Associated Press
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NEW YORK — 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, Neb.-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 says its policy is that "information must be promptly disseminated to the public," and that requests for exemptions will be closely examined.

People familiar with Buffett say he simply wants to get 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 last August. But Buffett appealed the ruling, and in doing so managed to keep the information secret for another five months.

Making the filings public can benefit investors who try to copy Berkshire's strategies, but don't want or can't afford to buy its Class A stock, which was trading in the $70,000-per-share range on 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.

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.

Buffett always asked to have portions of his SEC reports kept confidential, and always received approval, said Andy Kilpatrick, a stockbroker, former journalist and author of the book, "Of Permanent Value: The Story of Warren Buffett."

"If he discloses what he's doing, he's going to attract other people," Kilpatrick said. "He's not going to get the price he wants and people are going to piggyback him."

But the SEC took a closer look at the practice in 1997, after a Berkshire public filing omitted his large stake in banking giant Wells Fargo & Co. That led investors to believe Buffett had dumped the stock and they followed suit, driving down the share price.

Wells Fargo officials later said Berkshire still owned 8 percent of the company, but had requested confidentiality about the holding.

SEC associate director Douglas Scheidt cited the confusion over the Wells Fargo situation in June 1998, when he sent a letter to investment managers saying that companies seeking confidentiality were wrong to assume automatic approval.

SEC spokesman John Heine wouldn't comment about the Berkshire Hathaway filings, and said that officials who deal with confidentiality requests would not answer questions.

Kilpatrick said there's been a clear change in how the SEC handles Buffett's secrecy requests.

"He's done this for years and years," he said. "The difference is that, for the first time, the SEC is saying no."

Buffett has long been reluctant to speak to the media. He didn't return a telephone message left with Debbie Bosanek, his assistant at Berkshire. She said the company has no spokesman or spokeswoman.

Buffett holds a tell-all session with his shareholders at his annual meeting, and many don't mind that he waits so long to disclose what he's been doing with their money. After all, he has made many of them rich.

Rhoda Zusman, a 69-year-old mental health consultant from Tampa, Fla., bought several shares more than 20 years ago, when it traded at between $8,000 and $15,000.

Because Buffett "has such enormous effects on the way the market moves, I think he needs to be given special dispositions," she said.

But the head of a group representing state securities regulators says the federal government should force the disclosures.

"The more information for Main Street investors, the better," said Marc Beauchamp, executive director of the North American Securities Administrators Association in Washington, D.C. "Wall Street insiders would know what Buffett was rumored to be doing, so why should it only be for them?"

Hill, the investment strategist, said quicker releases may cost Buffett the time he needs to accumulate large holdings of stock at attractive prices.

"Mr. Buffett's going to move faster than perhaps he has in the past," said.

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