Buffett Chooses Kass as Bait for Berkshire Bulls
NEW YORK (TheStreet) -- It's official. Douglas Kass of Seabreeze Partners will play bait for bullish investors at the Warren Buffett-run Berkshire Hathaway(BRK.A) annual shareholder meeting in Omaha, Neb.
Kass has been appointed by the "Oracle of Omaha" to represent the bearish view on shares of Berkshire Hathaway at the investing conglomerate's shareholder meeting scheduled for May 4.
The investment manager and TheStreet contributor will be tasked with making the case against investing in Buffett and Berkshire, just as the company's shares continues to test record highs and outperform gains made by broader indices such as the S&P 500.
In Berkshire's 2012 annual letter released on March 1, Buffett called for an investor to present a negative perspective on the company at its shareholder meeting.
Kass applied for the role, and in a Monday interview with CNBC, Buffett said he was picked to present the bear case on Berkshire.
Interestingly, Kass may be able to borrow from Buffett's own words in making an argument against investing in Berkshire.
For the first time, Warren Buffett appears concerned he will underperform the S&P 500.
In Berkshire Hathaway's annual letter to shareholders, Buffett outlined why he is worried a rising stock market will put the firm's performance below that of the S&P 500 over a five-year stretch.
Buffett fears Berkshire's five-year book value growth rate may underperform the S&P 500 for the first time ever. In 2012, Berkshire's book value per share increased 14.4%, behind the S&P 500's gains of more than 15%.
Such a scenario would be the first in Berkshire's history, indicating that even the "Oracle of Omaha" is having trouble keeping up with rising markets. Continued underperformance may also reflect Buffett's expectations of a strengthening economic recovery.
"In years when the market is particularly strong, expect us to fall short," said Buffett, in his letter.