OMAHA â€" When Douglas A. Kass first learned that Warren E. Buffett had selected him to be the official skeptic at Berkshire Hathaway‘s annual meeting this year, the hedge fund manager knew he had a lot of work to do.
After Saturday’s gathering here, where he asked six questions tied largely to succession issues at the conglomerate, Mr. Kass felt he did the best he could against a master of question-dodging.
“I thought it went very well,†he told DealBook in an interview. “I think they were so direct and so pointed that he addressed them all, but maybe not 100 percent. Maybe closer to 80 percent.â€
The selection of Mr. Kass, who is betting that the price of Berkshire shares will drop, as the company’s “credentialed bear†was the latest effort by Mr. Buffett to shake up a meeting that has traditionally been an hours-long ode to one of the country’s most famous investors.
In recent years, the billionaire has added reporters and then research analysts to help toughen up the questioning. Adding Mr. Kass, the head of Seabreeze Partners Management, was only the latest unprecedented move.
“I think he was getting bored with the type of questions in recent years,†Mr. Kass said.
At least one shareholder praised the decision to invite a skeptic in as a questioner.
“While he was unconventional, his questions provoked a lot of dialogue,†Bill Smead, an investment manager who owns $13 million worth of Berkshire shares, said of Mr. Kass.
Before tens of thousands of the Berkshire faithful gathered at the CenturyLink Center here, the hedge fund manager asked about whether Mr. Buffett still had the same intensity of his youth; whether the company had grown so large that it should be broken up at some point; and whether the company’s famed culture and sterling reputation would endure after Mr. Buffett’s departure.
The six questions, three of which were alternates, were the result of what Mr. Kass said was over a month of research. Much of his bet against Berkshire revolves around his belief that Mr. Buffett has pursued deals that yield a lower return on investment than earlier acquisitions like that of Geico, as well as skepticism that the billionaire’s shoes could ever be fully filled.
One of Mr. Kass’ questions, a request for $100 million for Seabreeze to manage, with earned proceeds going to charity, was by his own admission a little gimmicky.
The hedge fund manager came up with the idea earlier this week for two reasons. One was to highlight short-selling, a practice that Mr. Buffett has shied away from for decades. Todd Combs, one of Berkshire’s investment chiefs, employed the tool during his prior career as a fund manager. (But the company’s vice chairman, Charles T. Munger, drew laughs by quipping that Mr. Combs “had so much success that he stopped doing it.â€)
The other rationale? It’d be a nice coup for Seabreeze.
A question about whether Mr. Buffett’s son, Howard, was up to the task of serving as Berkshire’s nonexecutive chairman had to be handled delicately. Mr. Kass said he tried to soften the blow â€" including by noting that his own son was in the audience â€" though his query concluded with the line, “Other than accident of birth, how is he qualified?†But he concluded that Mr. Buffett wasn’t offended, though didn’t answer the question fully.
Over all, Mr. Kass said the responses confirmed some of his concerns. But he enjoyed the meeting all the same, coming away with renewed respect for his host and a hope to be asked back.
“I think the measure of the man is that he invited a bear to the meeting,†Mr. Kass said.
