Things are Never Black and White

I just corrected a typo on last Thursday's "The Technician Versus the Venture Capitalist" post. I meant to say that the argument in that post was not an attempt to reduce the debate between Vinod Khosla and Hermann Scheer "to a four-legs-good-two-legs-bad situation, pitting 'two-legged' business decisions against 'four-legged' public policy." Last night, Guy Dinmore, of the Financial Times, filed a story in which the interests of the shareholders seemed to be aligning themselves with public sentiment over a particularly ugly policy decision. Here is Dinmore's lead:

Warren Buffett is known for hanging on to profitable stocks long term. This week, however, at the annual general meeting of his Berkshire Hathaway company, the “sage of Omaha” will hear an unusual case from shareholders who want him to sell his huge holdings in a well-performing Chinese oil company – to help stop the genocide in Sudan’s Darfur region.

I am particularly struck by the timing of this story, since my Saturday post had included the following quotation from French presidential candidate Ségolène Royal:

I'm today holding out my hand ... to all those who think that human values must always prevail over financial and market values.

Those of us who cannot afford to become Berkshire Hathaway investors, can enjoy a certainly level of irony in this little narrative of opposition between human values and financial values. After all, people invest in Berkshire Hathaway because they attach high value to Buffett's judgment and skill for making them a lot of money; but, in this particular case they seem to have acquired a distaste for what may be "blood money." This all harkens back to that little "prose poem" about self-execution from my youth.

Fortunately, I do not have to take sides on this matter. If Buffett chooses to exercise judgment that places financial values over human values, then that is his business, in the strictest definition of that word. Shareholders who do not like that priority can always "vote" by selling their shares. I am not convinced that a shareholders' meeting is the right place for a debate over moral questions. On the other hand, the world being what there is, I am not sure that there is a right place for such a debate; and , after all, a shareholders' meeting is supposed to allot some time for the "voice" of the shareholders. So I suppose I am glad that, at least in this particular case, this particular "voice" will be heard, if not because it will sway Buffett's own strategies then because it is an opinion that will be reported to fund managers around the world, each of whom can then make of that news what they will. It will also be reported to investors around the world, and they, too, can make their own decisions about their own investments.