OMAHA ( TheStreet) -- With little said of a successor to Warren Buffett or where the 'Oracle of Omaha' will fire his 'elephant guns' on M&A next, the participation of Doug Kass, as a bear betting against Berkshire Hathaway ( BRK.B) shares proved one of the biggest twists to the firm's annual shareholder meeting. Kass, president and founder of Seabreeze Partners and a contributor to Real Money Pro asked six questions as a so-called 'Berkshire bear' in a question-and-answer session at this weekend's meeting, evoking strong responses from Buffett on Berkshire's ( BRK.A) ability to cut opportunistic investments, such as crisis-time stakes in Bank of America ( BAC), Goldman Sachs ( GS) and General Electric ( GE) and the logic of naming his son, Howard, as a non-executive chairman of the conglomerate upon his passing. Buffett also provided a fierce defense of recent large acquisitions such as BNSF Railways, Lubrizol and Heinz ( HNZ) when asked by Kass whether the 'Oracle' has started to overpay for deals given Berkshire's current size. On Friday, Berkshire reported it earned over $43 billion first quarter revenue as overall net income hit $4.892 billion, or $2,977 per Class A share. Berkshire closed Friday's session trading at a record share price of $162,904, or a market capitalization of about $270 billion. While Kass's participation proved a twist to Berkshire's annual meeting, it is unclear whether Buffett and Berkshire's vice chairman Charlie Munger will invite a short-seller in the company's shares to the next shareholder meeting or whether they will allow Berkshire bears to go in hibernation. As someone betting against Berkshire, Kass faced a difficult crowd on Saturday, but more than held his own. In an interview, Whitney Tilson of Kase Capital gave about 50% odds a bear will become a regular participant at Berkshire's shareholder meeting. "Doug Kass provided a little spice. Although being the devil's advocate in that situation, it was an impossible role," William Smead, chief investment officer of Smead Capital, said of Kass's questioning. Kass "raised some interesting points and drew some good responses," Smead said. After Kass's first question, Buffett said to audience laughter on Saturday he was unconvinced to sell his shares in Berkshire. Munger, meanwhile, said he could make better arguments to sell Berkshire shares. "I want to say to the many Mungers in the audience, don't be so stupid as to sell these shares," Munger said on Saturday, when asked about how a successor to Buffett would impact Berkshire's performance. "That goes to the Buffetts too," Buffett added. Still, Kass did evoke strong responses from Buffett and Munger on long-standing shareholder concerns surrounding Berkshire's succession planning, its governance and its size. Many of the meeting's memorable quotes came in response to Kass's questions.
"Warren, it's said that size matters," Kass said, in his first question to Buffett. "You used to hunt gazelles, now you are hunting elephants." "I would take exception that we have paid fancy prices," Buffett responded, citing acquisitions such as Geico. "We have paid up for good businesses more than we would have 30 or 40 years ago", he added. "We have now realized that paying up for an extraordinary business is not a mistake," Buffett said of recent acqusitions such as BNSF Railways, Lubrizol and Heinz, which stand among Berkshire's largest ever. Kass's second question touched on Berkshire's unmatched ability to quickly make large investments when distressed opportunities emerge, for instance, multi-billion dollar stakes on Goldman and GE in the 2008 financial crisis. Kass noted those transactions veered from Berkshire's focus on investing in companies with solid fundamental growth opportunities and would be hard for a successor to replicate. "Berkshire is the 800-number when there's really sort of panic in markets," Buffett said, in response. The Berkshire CEO added the firm's reputation will be solidified when a successor is able to do sound deals when markets are frozen. "Berkshire will have unusual capital in turbulent times. My successor can say 'yes ' very quickly
to distressed deals that require large sums of capital. That will set you apart very quickly from others," Buffett said. Kass questioned Berkshire's decision to name Buffett's son Howard as the company's non-executive chairman once the 'Oracle' is gone from the firm. Buffett explained Howard was chosen to protect the company in the event that a mistake is made in choosing his successor, a situation Buffett gave 1% odds. "Howard has no illusions of running the business," Buffett said of the eventual split role of chairman and CEO at Berkshire Hathaway. -- Written by Antoine Gara. Follow @antoinegara