So if Dick Durbin selling his stocks and mutual funds last September isn’t a scandal, could his decision to buy shares of Berkshire Hathaway be? That possibility occurred to us when we remembered that Warren Buffett was reported to have had frequent phone calls with key lawmakers during the negotiations over bailout legislation.
So did these calls play a role in convincing Durbin to invest his money in Warren Buffett’s Berkshire Hathaway? We actually have no doubt that they did. Even if Buffett wasn’t actively hawking the shares to lawmakers, many must have been impressed by the prestige the Oracle of Obama commanded among their fellow Congressmen and Senators.
If you forget for a moment that we’re talking about a beloved American icon, you can imagine how this might be perceived. At the time, Warren Buffett admitted that his $5 billion investment in Goldman Sachs turned on his confidence the financial sector would get a bailout. Could Durbin’s decision to invest in Buffett have turned on the Senator’s confidence that Buffett knew how to profit from the bailout?
Then again, it’s probably more likely that Buffett is just the politician’s equivalent of ‘flight to safety.’ Either way, Durbin might regret his investment. If he bought shares of BRK.A on September 19th, he bought the stock near its all time high, a price the stock hasn’t come anywhere near since.
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