Just days after renewing his public criticism of Warren Buffett's current investment strategy and situation, the well-known short seller Doug Kass is out with a very bearish outlook for Berkshire Hathaway shares.
Today on TheStreet.com, Kass asks, "Is This the End of Warren Buffett?"
His post includes words like "tentative" and "seems," so it is not a definitive obituary. But Kass does answer his headline's question with a strong 'yes.'
Kass calculates that the market value for six of Berkshire's major stock holdings has dropped a total of $16 billion dollars since the end of September. This, he argues, "is more than just a bump in the road."
Based on reported Berkshire holdings as of September 30, and the stock moves since then, Kass estimates:
- Wells Fargo: $6.3 billion lost on 290 million shares
- American Express: $2.9 billion lost on 151 million shares
- Coca-Cola: $2.1 billion lost on 200 million shares
- Burlington Northern Santa Fe: $1.8 billion lost on 63 million shares
- ConocoPhillips: $1.5 billion lost on 60 million shares
- U.S. Bancorp: $1.5 billion on 73 million shares
Kass cites his own previously expressed concerns about Buffett's "investment style drift into derivatives," Buffett's "refusal to sell," and "his apparent lack of recognition that investment moats no longer exist in some of his largest investments," especially banking.
In his conclusion, Kass makes it clear he's not predicting a Berkshire downturn to be followed by a rebound once the economy and stock market improve.
"I now feel that Berkshire's valuation will steadily suffer, despite the long-term allegiance of its investors who are geared toward evaluating the company over decades, not years."
While Kass acknowledges that he has "worshipped" at Buffett's "investing altar" in the past, now, "From my perch, Buffett's salad days seem to be over; the only question that remains is the timing and to what degree investors will abandon the Oracle of Omaha."
Kass's bottom line: "All good things, it seems, in markets and life, must come to an end."
Based on the overwhelming email response this blog received in December when we asked, "Are you losing faith in Warren Buffett?" .. many of you don't agree.
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Berkshire Class B:
Burlington Northern Santa Fe:
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