Yesterday's announcement has made me increase the haircut modestly to Berkshire's cash and investments and to slightly lower the multiplier to noninvestment profits, leading to a reduced intrinsic value of $140,000- $145,000 per share. This has reduced the appeal of reward vs. risk in Berkshire as an investment.

Bottom line: The appeal of Berkshire's common shares has become more common (to me) with yesterday's news.

Within minutes of Buffett's announcement, the media calls came through to my office, and I appeared (separately) with Whitney Tilson on CNBC's "Fast Money" to explain my above analysis of the situation and further discussed the rationale for my investment response in reducing my holdings in Berkshire Hathaway shares -- I am long the B shares -- in after-hours trading.

I wanted to close today's opening missive with a personal thought.

On May 7, the Monday after Berkshire Hathaway's annual meeting, I will be making a presentation and speaking at Whitney Tilson's Value Investing Congress in the same convention center in Omaha where Warren Buffett will be talking to his shareholders two days earlier. To be honest, I will be taking my pilgrimage to Omaha in three weeks with a heavy heart and a pit in my stomach.
At the time of publication, Kass and/or his funds were long BRK.B and BAC, although holdings can change at any time.

Doug Kass is the president of Seabreeze Partners Management Inc. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.

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