Kass: Some Bombs in Buffett's Book

This blog post originally appeared on RealMoney Silver on June 4 at 7:32 a.m. EDT.

Warren Buffett's largest legacy investments continue to suffer, even as the shares of Berkshire Hathaway (BRK.A Quote) have climbed over the past two weeks.

Consider the poor short-term and long-term charts of Berkshire's four largest equity investments (number of shares, percentage ownership and year-end dollar value follow ticker):

• Coca-Cola (KO Quote) -- 200 million shares, 8.6% of total outstanding shares and $12.3 billion;
• Wells Fargo (WFC Quote) -- 303 million shares, 9.2% of outstanding shares and $9.2 billion;
• Kraft (KFC Quote) -- 124 million shares, 8.1% of outstanding shares and $8.1 billion; and
• American Express (AXP Quote) -- 151 million shares, 13.1% of outstanding shares and $7.9 billion.

Holding these four stocks "forever" has not been value-additive to Berkshire over the last decade; it's been a particular drain over the short term. Indeed, lugging these sizeable investments has resulted in lost opportunities. Moreover, to paraphrase the Master, "Where are the future moats at Coca-Cola, Wells Fargo, Kraft and American Express?"

Warren Buffett, who has achieved a remarkable investment record over 50 years, has begun to morph from the "Shakespeare of investing" into the "Mozart of marketing" -- of course, I am using exaggeration to make my point! -- as the law of large numbers has begun to disadvantage Berkshire. The company's asset and earnings bases are simply too large for the business to make outsized gains in the future.

I shorted more Berkshire Hathaway yesterday.

Doug Kass is the author of The Edge, a blog on RealMoney Silver that features real-time shorting opportunities on the market.