Buffett's fast-food preference: Dairy Queen over McDonald's

BARRY BEDLAN Associated Press Writer
AP Online
03-15-1998
OMAHA, Neb. (AP) _ Billionaire Warren Buffett's legendary investment firm released its eagerly awaited annual report Saturday, and Big Macs are not on the menu.

Stock in McDonald's restaurants is not among the portfolio released on the Internet by Berkshire Hathaway Inc., a company whose consistently high returns has made its annual report a big event on Wall Street.

Since the ``Wizard of Omaha'' took control in 1964, Berkshire Hathaway has turned into an investment vehicle with annual returns averaging nearly 25 percent for those who bought its stock.

Last year, Buffett surprised shareholders when he doubled Berkshire's stock in fast-food giant McDonald's from less than $600 million in 1995 to about $1.3 billion - 4.3 percent of the company's shares - by the end of 1996.

But no investment in the chain was mentioned in Berkshire's 1997 annual report.

``We don't want to comment on that because we feel that the report is complete and speaks for itself,'' Buffett's assistant Debbie Bosanek said Saturday. Buffett could not be reached for comment.

While McDonald's may be lost, Berkshire continues to hold onto its large shares in Coca-Cola, Walt Disney, American Express, Gillette Co., Wells Fargo Bank and the Washington Post.

The company also added to its portfolio in the past year another fast-food giant, Dairy Queen.

``I bring a modicum of product expertise to this transaction ... I have been a regular (of Dairy Queen) in Omaha,'' Buffett told Berkshire shareholders in the chairman's letter in the annual report. ``We have put our money where our mouth is.''

Although Berkshire is known for sticking to stocks, the company made big money in other investments last year.

It made $97.4 million from silver as dwindling supplies pushed prices to the highest levels in nine years. The company also made $61.9 million from selling 31.7 million barrels of oil over the past three years and $598.8 million in long-term securities with the U.S Treasury.

``We will occasionally make an unconventional move when we believe the odds favor it,'' Buffett said.

Forbes magazine last October called Buffett the second-richest man in the world, with a net worth of $21 billion. The richest is Microsoft Corp. chairman Bill Gates, with a net worth of more than $39.8 billion.


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