Warren Buffett and Valeant Have a Surprisingly Long History
Warren Buffett has never owned shares of Valeant Pharmaceuticals. That’s not for a lack of people trying to get the famous investor interested in the stock.
Valeant (VRX) was once one of the highest flying stocks on Wall Street, a darling of hedge funds. But in the past year the drug company’s shares have been one of Wall Street’s biggest disasters. And Buffett was drawn into the controversy around the company this year, after Charlie Munger compared Valeant to ITT, one of the worst conglomerates every assembled by Wall Street. As a kicker, Munger said the big difference between the two companies was their CEOs—Valeant’s Michael Pearson was far worse than ITT’s leader.
As a result, a lot of people are expecting Buffett will get a question about Valeant. But Buffett actually has a much longer history with Valeant than many people know.
Back in 2010, a young hedge fund analyst Cara Goldberg traveled to Omaha to meet Buffett. One of the two stocks she says she pitched to the CEO of Berkshire Hathaway (BRK-A) was Valeant. Buffett didn’t buy the stock.
More recently, hedge funder Bill Ackman tried to get Buffett to meet with the CEO of Pearson, according to emails uncovered by the Wall Street Journal, following Munger’s comments about the company.
A lot of people have criticized Buffett recently for his lagging stock market performance, something he is likely to get questioned about this year as well. But also part of Buffett’s stock picking performance is the stocks he has decided not to buy as well. Buffett could be doing much, much worse. Just look at Ackman’s performance.