Doug Kass: A Note From a Bear to a Berkshire Without Buffett at the Top
Over a decade ago, I was Buffett's pick as 'bear'; now I look at what Berkshire faces ahead without 'The Oracle' at the helm.
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Today is the first day in history without Warren Buffett at the helm of Berkshire Hathaway. I have written more than 100 columns on Berkshire over the last two decades. Today, I want to look back and give a special thanks to Buffett for the greatest invite I have ever received. And I want to look ahead.
"I am going to Disneyland - I mean, Omaha! I will be Daniel in the Lion's Den, wading in a sea of Warren Buffett's strongest admirers."
- Buffett Picks Douglas Kass as His 'Bear' for Annual Meeting - The New York Times
I was named "the credential bear" by Warren Buffett in 2013 and shared the dais with him and Charlie Munger at Berkshire Hathaway's Annual Meeting that same year. Buffett assigned me to ask hard-hitting questions. I did, but at the same time I was respectful in my delivery.
You can read about my adventures here:
* How Doug Kass Became Buffett's Bear
* My Pilgrimage to Warren Buffett's Omaha
In preparing for the meeting, I had researched heavily both Berkshire and "The Oracle" to come up with thoughtful, unique and differentiated questions that had never been asked of Charlie and Warren. This was not easy, as that history has been combed over in multiple books over the years.
Looking ahead, Buffett is a plain speaking man, so I will summarize my expectations of "Berkshire Without Buffett" in simple terms:
* Going forward, the Berkshire imprimatur (on their investments) and "halo" have been reduced in stature.
* The attraction of a company selling to Berkshire (without Warren Buffett "in control") has also been lessened.
* I expect Berkshire's estimated $380 billion in cash to be more likely to be employed in the purchase of companies and not for investing in companies.
Warren Buffett leaves Greg Abel with a fortress balance sheet and a solid and diversified revenue and profits base.
The biggest hurdle Greg Abel faces is the same one that I have expressed in the past, including at my 2013 Annual Meeting appearance. It's also one that Warren Buffett faced in the last decade. Berkshire Hathaway is too big to materially outperform overall U.S. corporate profits and too big to significantly outperform the S&P Index.
This commentary was orginally posted in Doug's Daily Diary on TheStreet Pro.
At the time of publication, Kass had no positions in any security mentioned.
