Republicans Should Sell Their Berkshire Hathaway Shares

Newsmax reports that Warren Buffett has advised Barack Obama that an increase in the capital gains tax would not harm investment:

"Citing advice from the sage of Omaha, Warren Buffet, Democratic presidential contender Sen. Barack Obama (Ill.) has called for a massive increase in the capital gains tax...No word from the billionaire investor Buffett in reaction to Obama’s policy proposal — aired first on MSNBC by the Democratic presidential contender in an interview with Maria Bariromo – but many other investors are already responding. Currently, the capital gains tax rate is 15 percent."

On November 21, 2005 Newsmax reported that Mr. Buffett had decided to actively back Obama:

"Financial guru Warren Buffett seldom invests interest in politicians, but he’s making an exception for Sen. Barack Obama. 'I’ve got a conviction about him that I don’t get very often,' Buffett said of the Democratic senator from Illinois. 'He has as much potential as anyone I’ve seen to have an important impact over his lifetime on the course that America takes.'"

In 2007 Mr. Buffett hosted an Obama fundraiser in Omaha, according to the International Herald Tribune:

"Buffett had plenty of company Wednesday night at a fundraiser for Democratic presidential candidate Barack Obama — and local organizers say Obama made a valuable investment.

"'I think his stock in Nebraska goes up from here,' said Omaha businessman Harley Schrager, who co-hosted the event with Buffet and others."

I currently hold four Berkshire Hathaway B shares worth about $17,760. They have done modestly well since I bought the first share seven years ago.

The question for me is not whether the stock will go up or down. One reason is that Howard S. Katz's investment portfolio, in which I have put a large share of my portfolio, went up 30% in the past couple of weeks, more than Berkshire has gone up in the past 7 years. There are lots of investment opportunities. The question is whether I wish to hold stock in a firm led by someone who wishes to raise my taxes, who actively supports a candidate with whom I disagree, and whose political activities are, in my view, harmful to the nation's future.

On balance, I do not think that Berkshire Hathaway's prospects justify further association with Mr. Buffett. The firm's investment returns since 2001 simply do not warrant "sucking in my gut" to be associated with him. I am selling my Berkshire stock.