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Kass: Buffett a Losing Bet Now

By    |   Friday, 30 Jan 2009 11:44 AM

Hedge fund manager Doug Kass has taken the sacrilegious step of betting against Warren Buffett — indeed against America itself. And the bet has paid off.

In a blog on TheStreet.com, Kass notes a recent quote from Buffett. “It's never paid to bet against America,” Buffett told NBC. “We come through things, but it's not always a smooth ride... This is an economic Pearl Harbor.”

Kass disagrees. He thinks the economy and markets are in worse shape than Buffett and others acknowledge.

“The U.S. ‘economic Pearl Harbor’ has humanized and brought down to earth many of the smartest investors in the world (e.g., Warren Buffett),” Kass writes.

Kass himself has profited by betting against Buffett’s Berkshire Hathaway. It’s off nearly 37 percent over the past 12 months, far less than the Dow’s nearly 68 percent drop, but a sharp decline for the world-famous investor.

“While the downfalls of a widening list of investment, financial and industrial icons have historically been associated with a market and economic bottom, the lesson remains the same,” Kass says.

“The average individual investor should continue to err on the side of conservatism in a market that provides a wonderful setting for trading but a not-so-exquisite setting for investing.”

Buffett disagrees, of course.

If investors are “buying into a business they understand at a sensible price, they should be buying. That's true at any time,” he told PBS.

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Hedge fund manager Doug Kass has taken the sacrilegious step of betting against Warren Buffett — indeed against America itself. And the bet has paid off.In a blog on TheStreet.com, Kass notes a recent quote from Buffett. “It's never paid to bet against America,” Buffett...
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2009-44-30
Friday, 30 Jan 2009 11:44 AM
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