McDonalds... Why Warren Buffet is buying. Message Board

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Non-Tech : McDonalds... Why Warren Buffet is buying.

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To: Andrew who wrote (18)	10/24/1997 7:26:00 AM
From: Doug (Htfd,CT)	Read Replies (1) of 24

Andrew, you've added detail to my sketch of the case for MCD. I don't know how to put exact dollars on the expansion case. I do note that over the past year, BERK has been buying and the MCD price seems not to go below the low 40's. I assume that's where he's got his brokers accumulating. True, it is a big company, which is why BERK can entertain investing some of its billions there. Other, smaller outfits (e.g., RAIN) might have faster percentage growth prospects, but may be too small for BERK to get nutrition from. I expect that MCD will be owning the stores its now opening in Asia, Eastern Europe, and other developing areas. As the brand name there grows, and as MCD develops a cadre of trained managers and product suppliers, I expect to see MCD building more owned stores, selling stores to franchisees and allowing proven franchisees to open stores MCD doesn't own. I agree that this is some years off before the franchise profits (clearly better than heavy-capital profits) start to really flow in. I'm hoping that's about the time my 11-year old needs her first tuition check. So we can borrow against her MCD shares to pay it without selling them. Doug (long MCD and RAIN)

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