This Day On The Street
Continue to site right-arrow
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
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stock Under $10 that he thinks could potentially double or triple in the next 6 to 12-months. See what he's trading today with a 14-day FREE pass.

Kass: My Berkshire Q&A Recap

Stocks in this article: BRK.ABRK.BKOIBMHNZ

Best as we know, he hasn't made material stock investments nor has he ever been engaged in taking over a large company.

Other than the accident of birth, how is he the most qualified person to take this role? Why should someone who has spent so little time with the company's managers suddenly become eligible for the position?

A: The response to this question, I felt, was the weakest of the six responses. Warren said that Howard would be the guardian of Berkshire's culture. "If a chief executive doesn't work out, having a chairman who cares deeply about the company's culture will make fixing the problem much easier."

Below is a list of the six unasked questions. (Again, 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. Is Berkshire too big to outperform?*

2. Are some of Berkshire's bank moats damaged or disappearing?*

3. Is the stock market overvalued by your metrics?*

4. Missed deals?

5. Regrets?

6. Is your optimism justified?

Unasked Question No. 1-- Is Berkshire Too Big to Outperform?

Historically, Berkshire's outperformance over the past 40-plus years has been spectacular. However, sustaining that growth is becoming more difficult to achieve.

You noted in your 2007 annual letter that, "Berkshire's past record can't be duplicated or even approached." And in almost every letter since that, you have uttered the same theme.

In the sole year of the last four (in 2011) that Berkshire succeeded in outperforming the share price of the S&P 500, it did so by a mere 2.5%. Even five years ago (in 2008), when performance was strong on a relative basis, Berkshire still recorded a negative return of -9.6% (while the S&P dropped by a staggering -37%).

Explain how Berkshire can persist in outperforming the markets while you continue to expand the size of your company.

Note: This question (one of my top six initially) was somewhat close to Carol Loomis's first question, so I canned it.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV


DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Our Tweets

Brokerage Partners

Top Rated Stocks Top Rated Funds Top Rated ETFs