NEW YORK ( TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.
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Warren Buffett's Tax-Efficient Enterprise
Originally published on Thursday, May 9 at 11:33 a.m. EDT. There are many issues to raise regarding Berkshire's structure, strategy and valuation -- taking profits on stocks, however, is not one of them. Here is a follow-up link to Paul Price's view that Warren Buffett should have sold Berkshire Hathaway's Coca-Cola (KO) and Washington Post (WPO) shares. After I wrote my response, I thought perhaps that I was too hard on Paul, but the message remains the same.
Warren runs a tax-efficient enterprise -- his buys in Coca-Cola and Washington Post are testimony. It is my view that there are many other different issues to raise regarding Berkshire's structure, strategy and valuation. At the time of original publication, Kass was short BRK.B.
Memo to Paul 'The' Price 'Is Right'
Originally published on Thursday, May 9 at 10:40 a.m. EDT. Washington Post and Coca-Cola are forever positions for Warren Buffett and Berkshire Hathaway. Your observations that Warren Buffett should have sold his Washington Post and Coca-Cola positions because of the drop in the share prices ignores a number of critical issues, including that these are "forever" positions for Berkshire Hathaway and that these are sizable, illiquid core investments for Warren.
In 2001, Coca-Cola faced significant leadership issues as well as a lot of controversy regarding the product itself (rumors of contamination, etc.). He was prepared and did look beyond those circumstances. I am not sure that I understand your point, as the shares have gone on to hit an all-time high. In the case of Washington Post, this is a forever position -- he is not interested in where the shares trade over a 10-year period, or, for that matter, over a 20-year period. My suggestion is to read Alice Schroeder's excellent book, The Snowball: Warren Buffett and the Business of Life, to learn more about his investing philosophy and why Coca-Cola and Washington Post are not for sale at any price.
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