Yes, sir. My name is Tom Conrad (PH) and I’m from McLean, Virginia. And I’m a shareholder. And I asked a question last year, Mr. Buffett, to you. I was struck with what you said, that it takes only three quality companies to be — to invest in to be set for a lifetime. And I asked you the question last year, “Should I wait until the market goes down, or should I get in now?” And you advised to get in now, and the three companies that I chose were Coca-Cola, Gillette and Disney. And because of that advice I was able to afford the ticket to come back this year — (laughter) — to ask you a second question. (Buffett laughs) And my question is this. I’m thinking of — WARREN BUFFETT
You ought to quit while you’re ahead, but go ahead. (Laughter) AUDIENCE MEMBER
I’m thinking of expanding to a fourth company. The fourth company that I’m thinking of is McDonald’s. And — WARREN BUFFETT
I see. AUDIENCE MEMBER
— I just wanted to ask you if you feel that McDonald’s has the same ability to dominate the way Coca-Cola and Gillette has. And secondly, do you feel that if the answer is yes, that I should wait until the price comes down a bit, or get in now? And that’s my question. WARREN BUFFETT
Would you like it to the eighth of a point, or shall we round off? (Laughter) In the annual report, we talked about Coca-Cola and Gillette in terms of their base business being what I call “The Inevitables.” But that related, obviously, to the soft drink business in the case of Coca-Cola and the shaving products with Gillette. It doesn’t extend to necessarily everything they do. But fortunately in both those companies those are very important products. I would say that in the food business, you would never get the total certainty of dominance that you would get in products like Coca-Cola and Gillette. People move around in the food business, from where they eat, from — they may favor McDonald’s but they will go to different places at different times. And somebody starts shaving with a Gillette Sensor Plus is very unlikely to go elsewhere, in my view. So they do not — you just — you never would get in the food business, in my judgment, quite the inevitability that you would get in the soft drink business with a Coca-Cola. You’ll never get it again in the soft drink business. I mean, it took a hundred — I guess it’d be 1886, so it’d be about 111 years to get to the point where they are. And the infrastructure’s incredible, and — so I wouldn’t put it quite in the same class, in terms of inevitability. That doesn’t mean — it can be a better stock investment, depending on the price. But you’re not going to get the price from me, and knowing Charlie I doubt if you’ll get the price from him. But we’ll give him a chance. (Laughs) (Laughter) He’s breathing, folks. He’s breathing. (Laughter and applause) CHARLIE MUNGER
We’ve got this down to a routine. (Laughter) No, I have nothing to add, Warren. WARREN BUFFETT
OK. (Laughter) I didn’t have anything to say, either. I just took longer. (Laughter)
How about area 2?
~ Please visit the site above for full video of Berkshire Hathaway Annual Meeting.
"In the food business, you would never get the total certainty of dominance that you would get in products like Coca-Cola and Gillette." ~Warren Buffett