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A Black Eye

Sigma Investment Counselors

March 31, 2011

My colleagues and I spent a considerable amount of time this morning discussing and debating the recent blockbuster disclosure that Warren Buffet’s (CEO Berkshire Hathaway and all around investment guru) fellow executive and heir apparent, David Sokol, had resigned from the company. Mr. Buffet released a statement that Mr. Sokol had resigned, and apparently there was some confusion as to whether his resignation was prompted by the disclosure that Sokol had purchased shares of Lubrizol for his own account, prior to Berkshire Hathaway buying the whole company. Whether unrelated or not, and whether illegal or not, the perception that Sokol benefited at the expense of Berkshire Hathaway shareholders (or the seller of the shares that Sokol himself purchased) is unacceptable. Reputation in the investment industry is of paramount importance. Sigma employees follow strict guidelines regarding their own stock purchases, and every purchase or sale is scrutinized by Cheryl Kotlarz, Sigma’s Chief Compliance Officer, to ensure propriety. In essence, Sigma employees are restricted from buying any investment that Sigma may be considering purchasing for clients. Likewise, employees are restricted from any sales of securities that clients hold if that security is being evaluated for sale. If Sigma elects not to purchase or sell for clients, an employee is free to act. If Sigma decides that the security is to be purchased (or sold) for clients, employees wait and purchase (or sell) the day after Sigma places the block trade for clients. This is just one of the ways that we seek to protect our reputation for integrity and fair dealing. We would welcome any questions or comments.

Robert M. Bilkie, Jr., CFA

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