Doug Kass

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Doug Kass is the president of Seabreeze Partners Management Inc.Expand

Until 1996, he was senior portfolio manager at Omega Advisors, a $6 billion investment partnership. Before that he was executive senior vice president and director of institutional equities of First Albany Corporation and JW Charles/CSG. He also was a General Partner of Glickenhaus & Co., and held various positions with Putnam Management and Kidder, Peabody. Kass received his bachelor's from Alfred University, and received a master's of business administration in finance from the University of Pennsylvania's Wharton School in 1972. He co-authored "Citibank: The Ralph Nader Report" with Nader and the Center for the Study of Responsive Law and currently serves as a guest host on CNBC's "Squawk Box."Collapse

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Doug Kass

 | Mar 1, 2015 | 12:00 AM EST

Warren is finally admitting to gazing at the end of the road.

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Doug Kass

 | Feb 28, 2015 | 8:42 PM EST
Charlie and Warren distilled 50 years of success into one overriding principle: Buy wonderful businesses at fair prices and don't buy fair businesses at wonderful prices. Like everyone, Warren has the investment scars from buying low-quality businesses at "bargain" prices (he calls it cigar-butt buying) and he is not afraid to share them with us in this year's letter. Future growth rates (in percentage terms), while likely superior to the average corporation, will not be so great in relative terms. Warren writes: "The bad news is that Berkshire's long-term gains -- measured by percentages, not by dollars -- cannot be dramatic and will not come close to those achieved in the past 50 years. The numbers have become too big. I think Berkshire will outperform the average American company, but our advantage, if any, won't be great." (In other words, size matters, See my first question from the 2013 Annual Meeting). Warren and Charlie seem to consider Ajit Jain, the head of the company's resinsurance business and Greg Abel, who operates Berkshire's energy businesses, at the top of the list as Buffett's eventual successor. It will likely be at least another 10 years before Berkshire will be unable to efficiently reinvest its profits and float. At that time, excess earnings will likely be distributed through continued share buybacks (preferable only if it can be accomplished at a reasonable price) or through cash dividends. An explanation of the Berkshire System by Charlie Munger, near the end of the letter, provided the most value-added information and served as a summation of the important precepts that formed the foundation and the many successes at the company. Something Was Missing in This Year's Letter There was one big void in this year's commentary.  The letter failed to address the recently-sold ExxonMobil (XOM) investment and the potentially "breached moats," questionable secular business outlooks (my editorializing) and relatively weak share price performance at American Express (AXP), Coca-Cola (KO) and IBM (IBM). (I have spent a lot of time in my Diary discussing this.) Some Classic Quotes Every year the Berkshire letter is populated by some great lines. Here are some of my favorites from this year: "My successor will need one other particular strength: the ability to fight off the ABCs of business decay, which are arrogance, bureaucracy and complacency." (Buffett) "Berkshire's net worth would be at least $50 billion higher had it seized some opportunities it didn't recognize as virtually sure things." (Munger) "The "weirdly intense, contagious devotion" of shareholders, admirers and press played into why Berkshire did so well under Buffett." (Munger) "My leisurely pace in making sales (of Tesco) would prove expensive...Charlie calls this sort of behavior 'thumb-sucking'...Considering what my delay cost us, he is being kind." (Buffett) Buffett became so good at what he does because of an early "decision to limit his activities to a few kinds and to maximize his attention to them... A lot like Roger Federer has done at tennis." (Munger) "Though marginal businesses purchased at cheap prices may be attractive as short-term investments, they are the wrong foundation on which to build a large and enduring enterprise. Selecting a marriage partner clearly requires more demanding criteria than does dating." (Buffett) My Final Impression "Touch me It's so easy to leave me All alone with the memory Of my days in the sun If you touch me You'll understand what happiness is Look, a new day has begun." -- Cats, Memory Let me conclude by observing, at the risk of sounding like an armchair psychologist, that the letter was sentimental -- full of memories, stories and anecdotes -- reminding me of Betty Buckley's signature song in "Cats." In keeping with what I would describe as a reflection, it was conspicuously longer than prior letters at 43 pages and 25,000 words, compared with the previous year's 24 pages and 14,500 words. My impression was that Warren wanted us to quickly run to start reading page 24 ("Berkshire - Past, Present and Future"). Indeed, it is recommended to do so on the top of page three. His words on page 24-forward seemed to revel in the reminiscences and, no doubt, in the extraordinary nature of the successes.  It is not hard to understand why. Berkshire's growth over the last five decades has no equal in corporate history. Per-share book value has risen by a compounded rate of 19.4% annually over the last 50 years. The increase in Berkshire's per-share intrinsic value over the past 50 years is roughly equal to the 1,826,163% gain in market price of the company's share price over the same period. To me, Warren is finally admitting to gazing at the end of the road and is appropriately relishing in his delicious journey. In closing, I have read every one of Warren's Buffett's letter on the first Saturday of March over each of the last 50 years, ever since I was a teenager. This year's letter was the most d
By

Doug Kass

 | Feb 28, 2015 | 10:32 AM EST

Reading through the lines, Ajit Jain looks top of the successor list.

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Doug Kass

 | Feb 27, 2015 | 6:10 PM EST
I couldn't help but mention there were some pretty hefty gains in closed-end municipal bond funds today. Enjoy the weekend!…
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Doug Kass

 | Feb 27, 2015 | 2:21 PM EST
I'm in the air (I hate Jetblue) after a delay. The television doesn't work and Internet is sporadic. What I can see, thus far into my trip, is some…
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Doug Kass

 | Feb 27, 2015 | 12:49 PM EST
Insufficient facts always invite danger. -- Mr. Spock, "Star Trek" We lost a great one today. Mr. Spock taught us to be resolutely logical,…
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Doug Kass

 | Feb 27, 2015 | 11:46 AM EST
Great stuff on CNBC's "Squawk Alley," with John and Q with Benchmark's Bill Gurley, who talks about FOMO (Fear of Missing Out). POMO, FOMO ... Oh No!…
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Doug Kass

 | Feb 27, 2015 | 11:39 AM EST
Feels like a sleepy summer Friday. I added small to iShares Nasdaq Biotechnology (IBB), SPDR S&P 500 (SPY), PowerShares QQQ (QQQ) and Microsoft…
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Doug Kass

 | Feb 27, 2015 | 11:36 AM EST
AAPL Watch to contain technology that will eventually unlock your car/replace your keys
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Doug Kass

 | Feb 27, 2015 | 10:13 AM EST
Peter Boockvar on Chicago PMI: 

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