Buffett still touts patience, potential
Saturday, July 21, 2001 - 12:00 a.m. Pacific
seattletimes.nwsource.com
By Sheryll Poe
Seattle Times staff reporter
Warren Buffett's forecast for the Puget Sound economy was summed up in a story about a farmer who takes an ostrich egg into a henhouse and tells the hens: "This is what can be done."
"Seattle is the ostrich egg. The community has momentum, clearly," he said. "You've been lucky."
But, cautioned Buffett, the world's second-richest man, "People are most gullible when they are prosperous." During the recent economic boom, he said, "wealth was not created but transferred" and since the slowdown "money went from the gullible to the somewhat more sophisticated."
Buffett, chairman of Berkshire Hathaway, charmed 1,100 investors and students with self-deprecating humor at a luncheon yesterday to celebrate CityClub's s 20th anniversary.
Buffett's portfolio, which includes established companies such as Coca-Cola, Gillette and locally founded See's Candy but avoids flashy tech stocks, has long puzzled investors.
"You don't build great businesses in a year or five or 10," he said.
His patience seems out of place in this era.
"I would not say it's more difficult," he said of long-term investing. "If you own a stock and it doesn't go anyplace, it seems like a long-term investment."
When asked what a good investment for the future was, Buffett said, "Herb told me to say jewelry," referring to Herb Bridge, co-chairman of Ben Bridge Jewelers, which Buffett owns.
He referred to Ben Bridge as a "masterpiece that took 88 years to paint" and said he picks companies such asBen Bridge by sizing up the motives of the potential sellers.
"I have to look them in the eye to see if they love the business or they love the money," he said.
"We need people who love their businesses and even though they sold them, feel they still own them."
He pointed out that his company uses the Internet in a significant way — particularly through Geico, the insurance company, that sells policies over the Internet. But he maintained his stance that he won't be investing in high-tech stocks anytime soon.
"The chances that we would get into something in tech development are next to zero," Buffett said. "I don't bring anything to that party, so I'll stick with what I know."
Buffett credits his success to luck, calling it the "ovarian lottery."
"I happen to be wired right to be dropped into the United States at the end of the 20th century in a capitalist society," Buffett said.
He said the overall economy, while on the edge of a recession, will eventually pick up.
"This country knows how to prosper. It's got a market system that works wonderfully," Buffett said. |
