Warren Buffett’s groundbreaking decision this week to donate most of his wealth to charity (and specifically to his buddy Bill Gates’ charity) was roundly greeted with applause and respect. It was hard to find anything really negative to say; the man accumulated tons of money and then decided — instead of buying Omaha or setting up trust funds for the next ten generations — to hand it over to a charitable organization that has a proven record of making the world a better place.
Then again, most people are looking at this from the perspective of human beings and not of heartless calculators who would rush to do a cost-benefit analysis of Buffett’s generosity. For that, we must rely on the Wall Street Journal. Here’s the lead of its piece (subscription required) on the front page of yesterday’s Money & Investing section: “Warren Buffett’s decision to donate the bulk of his Berkshire Hathaway Inc. shares to charitable foundations weighed on the company’s stock amid concern that, as the charities sell shares to fund their projects, it could hurt the stock price in the long term.”
The article goes on to paint a variety of other scenarios, all hypothetical in the extreme, that serve to throw a dark cloud over Buffett’s donation. The charities are going to wantonly cash in shares and hemorrhage money on AIDS research and development projects! If that isn’t bad enough, all this reckless benevolence must be a sign that Buffett is on his way out the door. That will surely cause the stock to plummet!
Of course, the stock’s generally stable history is then laid out as a foil for a future that now seems uncertain, or “cloudy” as the Journal’s headline puts it, because old Warren had to go and get mushy on us.
Buffett’s act is nothing if not seminal — one that could well revolutionize the way that both the private sector and governments allocate money in this country. All for the better, as far as most people are concerned. But the only cheer that we get from the Journal comes at the very end of the piece, where Buffett is quoted saying that Berkshire shares are ideal charitable contributions because they are now in the possession of do-gooders and have a relatively stable, long-term growth profile.
As for reporters’ fears that billionaire hedge fund managers might lose a few bucks on short-term fluctuations in Berkshire stock, Buffett “estimated that about 15 percent of Berkshire’s shares are bought and sold every year, and predicted that the figure would rise to 17 percent if all the charities sell all the stock they receive each year. That is a sizable increase of 13 percent in the annual turnover.”
Says the Sage of Omaha: “I see no downside to that.”
Good to know. But there is only one question that really needs to be answered about this article: Why write it?
Is it because the Journal’s sources actually stand to profit from the very fluctuations they claim to fear (and profit even more if they can whip up some market hysteria with an article in a prominent business newspaper)? We can only speculate, but there is no doubt that there is a deeply cynical strain of business reporting that has come to reduce everything to numbers, seemingly blind to the reality that business affects people — real lives that are either trampled or uplifted depending on the decisions of market players like Buffett.
That is sad. But who knows? Maybe one day the folks on Wall Street will come to realize that good deeds add value, and maybe the journalists who cover that beat will report on the perfect negative correlation between the rise in Berkshire’s stock and the demand for tasteless fortresses and marble statuary in Greenwich, CT.