This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Kass: My Berkshire Q&A Recap

This column originally appeared on Real Money Pro at 11:26 a.m. EDT on May 7.

NEW YORK ( Real Money) -- This morning's opening missive reviews the six questions that I presented to Charlie Munger and Warren Buffett at Berkshire Hathaway's (BRK.A - Get Report)/ (BRK.B - Get Report) annual shareholders meeting. I also have included their responses to my questions as well as six alternate questions that I was prepared to ask in the event that someone asked one of my primary questions ahead of me.

Going into the meeting, there were a number of subjects that I thought warranted discussion. (I have a bunch of additional questions not mentioned today, so I hope Warren invites me back next year!)

It was important for me to balance my hard-hitting and pointed questions with a courteous and respectful delivery, considering the extraordinary accomplishments of the men that I was addressing and the unique invitation to a short seller who was negative on their company. Initially, each of my original six questions was far too lengthy (500-1,000 words). Given the setting and Warren's crafty ways of answering questions, my mission was to condense each into a tightly worded question.

That process took a surprisingly long time.

Let's start with the six questions I asked on Saturday. (I have marked with an asterisk the six primary questions that I had planned to ask. Three of my top six questions were previously asked so I used three of the alternate questions.)

1. Size matters: Berkshire's growth strategy -- chasing elephants instead of gazelles?*

2. The Buffett factor: What happens when Warren has left us?

3. Does a Berkshire breakup make sense?*

4. Has Warren's investment process become less intense over time?

5. A short-selling challenge*

6. Is Howard Buffett qualified to be nonexecutive chairman?

I started by thanking Charlie and Warren for the invitation and told them that I was honored. Then I said that I looked forward to playing the role of " Daniel in the lion's den" in front of over 30,000 of his closest friends and greatest admirers. (That got a cheer!

Question No. 1 -- Size Matters

Q: As it is said, Warren, "Size matters!"

In the past, Berkshire bought cheap or wholesale -- for instance, Geico, MidAmerican Energy, the initial Coca-Cola (KO - Get Report) purchase and Benjamin Moore. Arguably, your company has shifted to becoming a buyer of pricier and more mature businesses -- for instance, IBM (IBM - Get Report), Burlington Northern Santa Fe, Heinz (HNZ) and Lubrizol, which were done at prices to sales, earnings and book value multiples well above the prior acquisitions and after the stock prices rose.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free

Markets

Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs