* Class B shares down 79 cents in morning trade

* Investors say Berkshire may be buying stock

* Analyst says stock near its cheapest ever (Adds Barclays comment, byline, updates shares)

By Ben Berkowitz

April 18 (Reuters) - Shares in Berkshire Hathaway Inc fell 1 percent in morning trading Wednesday, a relatively limited reaction to the news that Chief Executive Warren Buffett has prostate cancer and will start radiation treatment this summer.

Buffett said on Tuesday that his illness was in Stage 1 and "is not remotely life-threatening or even debilitating in any meaningful way."

A number of long-term Berkshire shareholders shrugged off the news, given Buffett's good prognosis and the succession planning Berkshire had already started.

"We've owned the stock nearly continuously for 13 years. We've thought about succession a lot," said David Rolfe, chief investment officer of Wedgewood Partners, which holds Berkshire Class B shares.

"Somebody needs to say to themselves before they dump their Berkshire, in the mid-$70s ... there's a chance they could be selling their shares back to Buffett," Rolfe added, referring to a buyback Berkshire launched late last year.

Class A shares fell $1,310 to $120,000, while the more widely held Class B shares fell 79 cents, or 1 percent, to $79.97.

After underperforming the S&P 500 in 2011, the stock has lagged again this year, with the Class B shares making just half the gains of the broader market through Tuesday.

Barclays Capital, in a note to clients, said the shares were trading near historical lows as a percentage of book value.

"This announcement again highlights the key-man risk involved in investing in (Berkshire) shares because Mr. Buffett may be the only one who can manage the company with as much success as in the past," analyst Jay Gelb wrote.

Gelb noted that in 2000, when Buffett had surgery for colon polyps, the stock fell 5 percent over the five weeks from the announcement of his illness to the completion of the operation, versus a flat S&P 500. (Reporting By Ben Berkowitz; editing by John Wallace)