Kass' Q&A Left Me Wanting More
The next unchallenged Kassism: "I'm also short Berkshire because the salad days for insurance, which is the cornerstone of Berkshire's business, are over."
I have a one-word retort: Geico. But more importantly, I want to know why the reporter didn't. It's a very good insurance play long-term and, uh, is car insurance wilted lettuce?
Not to mention that at the most recent annual meeting, Buffett spoke about the company's recent success insuring municipal bonds. It's a little different, but aren't companies like MBIA (MBI) and Ambac (ABK) using Buffett to insure them? Are those salad days over ... before they even really began? We won't know, because if the question was asked, the answer wasn't shared.
Anyhow, Kass is soon off talking about Buffett's exposure to the housing downturn through Clayton Holdings (CLAY). But instead of the journalist noting, for the savvy investor's benefit, that Clayton is but a pimple in Bekshire's vast stable of holdings, the conversation then turns toward Kass' shorts in the dental industry.Anyhow, there are concerns about the fact that Buffett can't work or live forever. But that is no secret and has probably been priced into the stock. In fact, it's probably another reason for the narrowing outperformance, which, again, is no reason to short. What is probably not priced in is the fact that his successor might be decent. And the potential for upside surprise is not what you should look for in a short. Anyhow, Doug is normally my man. And he talks about shorting more than Berkshire. He recommends everything from Colgate-Palmolive (CL) to Target (TGT) to Danaher (DHR), which Doug says he considers a dental company. But no matter the wisdom of the interviewee or the merits of the underlying ideas, which Doug spells out in more detail here, beware and be aware anytime you see ideas set forth in a question and answer format.
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