THE BLOG
12/23/2012 12:01 pm ET | Updated Feb 21, 2013

Hathaway Effect Again? Wardrobe Malfunction Gives Buffett a Rise

2011-03-03-HathawayEffect.jpgA couple years ago I suggested that there was a "Hathaway Effect": When actress Anne Hathaway was in the news, it might increase the share price for Warren Buffett's BerkshireHathaway company. Turns out that Anne's recent wardrobe malfunction may have shot the price of Buffett's company up a whopping 2.4%.

For those who didn't hear, Anne was recently photographed coming out of a limo at the New York premiere of her new film Les Miserables - but she neglected to wear underwear that day. Her forgetfulness could have made investors billions, because as the news became front page headlines in the mainstream media, Buffett's stock price shot up from $130,821 per share to a close of $134,000 on December 12 (by comparison, in the prior four days, the price had barely moved, slipping downwards slowly by just 0.46%).

Surely there will be those who poo-poo this correlation by noting that technically Anne showed her hoo-hoo the night of December 10. But the news only went mainstream late on the 11th (an LA Times story was posted 3:59pm Pacific time - well after closing bell), and more significantly, Hathaway discussed the incident herself on NBC's Today show in a slightly creepy interview with Matt Lauer the morning of December 12 (New York Post headline: "Matt Lauer to Anne Hathaway: 'seen a lot of you lately'"). By discussing the incident herself so publicly, it went from the netherregions of TMZ to mainstream American media in a hearbeat.

Likewise, there will be those who suggest that BerkshireHathaway's stock rose so significantly because the company announced on December 12 that it was purchasing 9,200 Class A shares from "the estate of a long-time shareholder" (the press release came out of Berkshire's Omaha office barely an hour after the Today show interview).

But the incident does raise a few troubling suggestions: Now that the Hathaway Effect has been widely acknowledged as a byproduct of algorythmic robotic trading by everyone from the Atlantic Monthly to CNBC, Time, the Financial Times and Nobel Prize-winning economist Paul Krugman in the New York Times to Buffett's own company, the question arises, how could it be manipulated? Now I'm not suggesting any nefarious motives or a full-scale Elizabeth Warren-inspired NYSE investigation into vaginagate, but...

Anne Hathaway's no Britney Spears. This is a smart, talented actress (who sang live during filming of Les Miz and may get an Oscar for it). She's known as a savvy dresser, even getting Joan River's approval from time to time. Anyone who saw Hathaway in The Devil Wears Prada knows she learned a thing or two from Meryl Streep. In short, this is not some stumbling panty-deprived Lohan who gives new meaning to pap(arazzi) smear. Is it possible that she (or a friend, or maybe even someone blackmailing her) owns Berkshire stock and wanted to influence the price?

Or maybe Buffett or his minions decided to put out news of the stock buyback the same day (virtually the same hour!) as Hathaway's controversial appearance on Today? The buyback was widely regarded as shrouded in mystery at the time, including speculation on the death of billionaire Berkshire investor Albert Ueltschi. And why did Matt Lauer - normally a clean-cut avatar of midwestern sensibilities - go out of his way to delve into Hathaway's private parts on a network morning news show? Is Today really the new TMZ? Does Lauer hold Berkshire stock? Or does he just like pretty actresses with nothing to hide?

Who knows? But I grew up in Omaha and if there's one thing I learned in Latin class at Central High School (and yes, arguably there was only one thing I learned in Latin class), it's "semper ubi sububi" which translates as "always wear underwear". Come to think of it, my Latin teacher Miss Ryan (who drilled that phrase into our heads), lived just six blocks from Warren Buffett. Hmm, coincidence?