“Bring your tough questions. See if you can drive the stock down 10 percent.” That’s what Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) chairman Warren Buffett said to Douglas Kass, the founder of Palm Beach, Florida-based Seabreeze Partners Management. Doug Kass, who is betting against Berkshire Hathaway, and has accepted Warren Buffett’s challenge to ask bearish questions at the company’s annual meeting on May 4, 2013.
The Oracle of Omaha was looking for a bear on the company, someone who has a short position, to join the journalists and analysts in the annual questioning of himself and Charlie Munger. Thousands of shareholders, analysts and investors travel from across the world to listen to the billionaire investor Warren Buffett and Berkshire vice chairman Charlie Munger.
Kass said he learned about Buffett’s challenge while watching his interview today on CNBC, and that he is really honored to be picked. On March 10, 2008, Kass wrote an article in TheStreet.com that he was shorting Berkshire when the class A shares closed at $131,400, due to fall in Buffett’s equity portfolio and the difficulty of replacing Buffett from the top job. The shares plunged to $71,000 in March 2009. Kass said he was successful shorting Berkshire Hathaway Inc., and for the right reasons. Berkshire shares have rallied since, touching $151,299 today.
Kass has also made some bullish calls. At the end of 2011, he recommended purchasing stocks, and S&P 500 gained 13 percent the following year. He also made a similar call in March 2009 when the benchmark rallied over 60 percent through the rest of that year.
Inviting a bear to the annual shareholders meeting will “spice things up” at the gathering. Last year, Buffett had invited a panel of three sell-side insurance analysts to shoot questions about Berkshire’s businesses. Later, Buffett realized it was too narrow a focus. This year, Nomura Holdings, Inc. (ADR) (NYSE:NMR) (TYO:8604)’s insurance analyst Cliff Gallant and Jonathan Brandt of Ruane Cunniff & Goldfarb Inc. will join Dough Kass.
Kass told Bloomberg that for the past five days, he is betting on a decline in Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B)’s more actively traded Class B shares.