Nice deal, Mr. Sokol.

Sunday, April 3, 2011

I’m no stock market guy…not by a long shot…but I do read a lot and now I have a couple of questions. My father and father-in-law both worked for the Lubrizol Corporation until they retired and so any time I see something in the business section about the company, it catches my eye. Lots of folks are aware that Warren Buffett has made a $9.7 billion offer to buy the chemical additives giant and that their stock soared from around $105 per share to $135 per share on this announcement. A couple of weeks later, Buffett’s company, Berkshire Hathaway Inc., announced that the man who started confidential talks with Lubrizol about a month before the offer and proposed the idea of the purchase to Mr. Buffett, David Sokol, had resigned from the company. Oh yeah…and David bought 96,000 shares of Lubrizol stock less than two weeks before the announcement, which will turn a tidy profit of $3 million for David if the sale goes through.

This bothers me on a couple of different levels. First…that the guy had $10 million to make the purchase. I hate it when people have that much discretionary income because I figure they were being overpaid somewhere along the line and lots of smaller folks suffered as a result. Second…how in God’s name could this not be insider trading of some kind? I mean maybe he makes $10 million purchases as a regular occurrence and if it hadn’t been Lubrizol, it would have been something else, but if not…well…its looking just a little suspicious. Third…why is he quitting after making the recommendation to purchase Lubrizol? He earns around $12 million a year (with an occasional $3 million bonus for making a crafty stock purchase) so I’m thinking it’s not for a better job. Does he think it was a bad idea and doesn’t want to be around to deal with it? I don’t know.

Well…I kind of got skunked on my workout. I was supposed to take Heidi back to Kent and for the entire drive there and back, I was watching the skies and hoping the rain would hold off so I could go for a 2-hour ride. It did…until I was 3 minutes from the house. I suppose that’s a good thing since I wouldn’t have wanted to have been out 10 miles when the skies opened up. I could have gotten on the trainer, but the thought of that when I was so close to riding outside really depressed me…that and I was feeling so poorly that I laid down and passed out for 2 hours. Bottom line…I didn’t work out and I’m still fighting something. I suppose yesterday’s double took its toll, so maybe I need a little more recuperative time. We’ll see what tomorrow brings and if I can get David’s number for some more hot stock tips, I’ll pass it along.