Colin Barr

Following the money in banking, economics, and Washington

The Buffett lunch bubble

June 14, 2010: 5:40 AM ET

The Warren Buffett bubble shows no sign of deflating.

An anonymous donor bid a record $2.6 million to arrange a lunch with Buffett, the billionaire investor who runs Berkshire Hathaway (BRKA). That is up from last year's $1.7 million and the previous high water mark of $2.1 million, set in 2008.

Warren Buffett

Check please

The hefty tab suggests that Buffett retains his glow in spite of the bruising he has taken this spring in defending two portfolio companies, Goldman Sachs (GS) and Moody's (MCO), that aided and abetted the housing bubble.

Buffett's defense of Goldman -- which has been accused of failing to tell its clients it was helping others bet against them -- was curious because he has long been a critic of the casino capitalism the trading firm has come to embody. His support of Moody's was even more far fetched: he insisted it simply failed to see the housing bubble, blithely ignoring that the firm's supposed value lay in alerting investors to potential dangers.

Regardless, Buffett remains one of the richest men in the nation and is still revered by many investors. That helps to explain why the tab for this year's lunch will set the winning bidder back more than 100 times as much as the winning bid a decade ago.

In 2000, a former dot-commer named Peter Budlong took seven friends to the Stars restaurant in San Francisco to chat with Buffett about telecommunications, the Internet, and bridge. He paid a mere $25,000 for the privilege.

This year, that was the minimum bid. According to auction details posted on eBay, the lunch will take place at the Smith & Wollensky steakhouse in Manhattan "at a mutually agreed time and date to be determined by Mr. Buffett and the winning bidder."

Of course, there are more troublesome bubbles than this. The winner, whoever he or she is, can surely afford the tab, and proceeds of the auction will go to the Glide Foundation, a San Francisco charity that helps the homeless. Those conditions weren't evident in the housing bust, to say the least.

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About This Author
Colin Barr
Colin Barr
Senior Writer, Fortune

Colin Barr has covered finance for Fortune.com since November 2007. Previously he was a writer and editor for TheStreet.com, winning a 2006 Society of American Business Editors and Writers award for "The Five Dumbest Things on Wall Street," and for Dow Jones Newswires. He is a 1991 graduate of Penn State and lives in Port Washington, N.Y., with his wife Meena Bose and their two kids.

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