For the most part, the annual meeting hosted by Berkshire Hathaway is usually a lovefest for the Oracle of Omaha.
Things are going to be different this Saturday, when a hedge fund manager picked directly by Warren Buffett himself tries to add a measure of skepticism to the otherwise happy-go-lucky proceedings.
“It’s fair to say that I’m Daniel in the lion’s den,” said Douglas Kass this past Thursday during the middle of his trip to Nebraska. He is the head of Seabreeze Partner’s Management. “But I’ve prepared intensely.
Mr. Kass is openly bearish on Berkshire Hathaway and he believes that the stock price is going to fall. He is the latest addition to a shareholder meeting formula that has been in place for decades at this time. In early May of each year, over 18,000 shareholders head to Omaha in order to listen to what beloved CEO and Chairman Warren Buffett has to say.
Throughout the years, the majority of the questions asked of Warren Buffett have been relatively soft. People ask about his religious beliefs and sometimes they may ask about the global economy.
This year, Buffett has chosen to try and toughen up the questions at the 2013 annual meeting. This is the exact opposite of what most publicly trading companies attempt to do. He also asked analysts and reporters to ask tougher questions this year as well.
But the boldest move yet is to invite Douglas Kass. He is a hedge fund manager that is known frequently for his contrarian positions. He often voices his opinions in appearances on television shows that talk about business, and he also has a column on TheStreet.com. It’s also known that Douglas Kass spent time working for Ralph Nader during his student years.
“See if you can drive the stock price down to 10%,” teased Warren Buffett while talking to his new foil in March during an interview on CNBC.
Over the years, Douglas Kass has repeatedly looked into the weaknesses of Berkshire Hathaway. He even wrote an article about them on TheStreet.com. The weaknesses mentioned at the time were the advanced age of Warren Buffett plus the company’s slow growth.
Douglas Kass has a short position on the shares of Berkshire Hathaway. He didn’t disclose the size of the position, but said it is an average size for him. Over the past month, Kass has thoroughly read up on Buffett and Berkshire Hathaway, and he’s whittled 25 attention grabbing questions down to just six.
If Buffett answers two of the six questions, it will generate seriously big news. The four others have never been asked of Buffett before.
At the same token, Douglas Kass says that he is actually a strong admirer of Warren Buffett, who some people refer to as the Oracle of Omaha. Since Kass first began his research, he said he found a number of similarities between himself and Buffett. One similarity is that they both have been treated for prostate cancer, and another is they both used to collect discarded horseracing tickets during their younger years.
Douglas Kass is bringing his son and a group of friends to his first Berkshire Hathaway annual meeting.
“I’m psyched,” said Kass. “It’s like the financial World Series to me.”
Apart from Douglas Kass, many of the usual elements that you’d find at a Berkshire Hathaway annual meeting will still be in place this year. Buffett is still likely to say that his company – a major conglomerate that owns running shoes, railroads and private jets as part of its holdings – has a full plan for succession in place when he finally does decide to retire from his position. (Don’t be surprised if he doesn’t say who he plans to have succeed him as CEO.)
It’s also probable that Buffett will discuss his burning desire to make bigger deals, which is his major claim to fame at this point. Oddly enough, neither of his acquisitions so far this year qualifies as giant takeovers. Along with a Brazilian investment firm, Berkshire Hathaway bought H.J. Heinz for $23 billion. Berkshire also purchased 20% of IMC, the Israeli tool maker. It already owned the other 80% of the company, and they paid $2 billion for the last 20%.
“It’s back to work; Charlie and I have again donned our safari outfits and resumed our search for elephants,” wrote Buffett in his annual letter to shareholders. The Charlie he’s referring to is his longtime investment partner and vice chairman of Berkshire Hathaway, Charles T. Munger.
It is also expected that Warren Buffett will discuss buying out newspapers recently, since he has bought 28 dailies over the last year and a half for a total of $344 million. This campaign for acquisitions is definitely not his most expensive to date, but Buffett describes it as an addiction because he sees such value in local newspapers.
It’s uncertain as of yet if anyone will ask Buffett about a future move to social media. At 11:20 AM on Thursday, Omaha time, Buffett decided to overcome his aversion to technology and posted his first Twitter message. He wrote “Warren is in the house,” and a cameraman from Fortune magazine caught the whole thing on video.
The tweet was reposted over 25,000 times later that same afternoon, and his Twitter account already has over 176,000 followers. Douglas Kass is among them, and he is also a prolific Twitter user. He is using the micro blogging platform to document his passage to Omaha.
This was a major surprise to everyone, since Buffett once said that he missed an important message about Lehman Brothers because he had no idea how to check the voicemail on his phone.
“I guess he’s not as much of a Luddite as he professes,” said Kass.
Buffett hinted that Twitter was a little bit more of his style than some of the other social media platforms.
“The co-founder came from Nebraska, so it can’t all be bad,” said Buffett in reference to Evan Williams, Twitter co-founder.