Advice From Buffett: Don’t Follow Me

Warren Buffett, whose stock-picking skills have made him the world’s second-richest man, has some advice for investors who want to piggyback on his strategies: Don’t jump on everything the press says about my trading moves.

News organizations routinely report on regulatory filings that list Buffett’s holdings, and markets often move for stocks that are mentioned. The problem? Buffett’s Berkshire Hathaway Inc. takes advantage of rules that let the company keep some of those filings secret for at least 12 months.

So, by the time the world learns about Berkshire’s holdings, Buffett may have long since changed course.

Berkshire says it’s concerned when trading jumps on the dated news. “This has occurred in circumstances in which Berkshire either no longer owned the security in question, or otherwise had changed its position,” Berkshire said in a letter to the U.S. Securities and Exchange Commission.

Berkshire is more concerned that investor enthusiasm for Buffett’s picks could hurt its own trading profit if the company disclosed its holdings more quickly. Berkshire said it seeks to delay public disclosure only for stocks that are part of “an active trading strategy,” when more timely reports could influence the price of shares Buffett may want to buy or sell.

Berkshire’s letter, obtained from the SEC through the Freedom of Information Act, is the latest official word to the agency on reasons for the company’s secrecy. It was written in August 1997 to tell the agency why Buffett’s Omaha insurance holding company wanted confidential filing status for some investments.--Bloomberg News