U.S. Markets close in 25 mins

Warren Buffett is the world's greatest investor, but Doug Kass is still short Berkshire

Aaron Task
Editor in Chief

At the 2013 Berkshire Hathaway annual meeting, aka "The Woodstock of Capitalism." tens of thousands gathered to show their devotion and affection for the company and its founder, Warren Buffett.

But one invited guest came not to praise "the Oracle of Omaha" but to bury him -- at least rhetorically. Famed short-seller Doug Kass, managing partner of Seabreeze Partners, was invited by Buffett to play the role of "credentialed bear" and try to dissuade the crowd from owning Berkshire stock. It was a "professional highlight" Kass describes in his new book Doug Kass on the Market: A Life on The Street. 

"I was kind of Daniel in the Lion's den," Kass explains in the accompanying video. "With 55,000 of [Buffett's] devotees...trying to stump him with original hard-hitting questions. But at the same time I wanted to be respectful because I worship at his investment altar."

It's unlikely Kass convinced anyone in the audience to sell their shares. "Doug, you haven't convinced me to sell the stock, but keep trying!," Buffett joked a one point.

Sill, Kass notes Berkshire stock was "dead in the water and underperforming both absolutely and relative to the market" for several months after the 2013 annual meeting. Berkshire shares have since rebounded and have outperformed the S&P 500 in the roughly 18 months since the event.

Kass was short Berkshire Hathaway stock then and remains so today, noting he has recently added to the position, as discussed in a recent post on TheStreet.com's RealMoney Pro service:

"Recent earnings reports at Coca-Cola (KO) and IBM (IBM), two large Berkshire Hathaway investments totaling almost $30 billion, suggest that the companies' moats appear to be vanishing."

In the past, Warren Buffett has hunted gazelles (that are undervalued); he is now hunting elephants (that are fairly valued to overvalued). Many of the recent buys might be great additions to Berkshire's portfolio of companies, however, the relatively high prices paid for these investments could potentially result in a lower return on invested capital."

Aaron Task is Editor-in-Chief of Yahoo Finance. You can follow him on Twitter at @aarontask or email him at altask@yahoo.com.