BerkshireHathaway Inc.'s size has made it difficult to find lowcost-of-capital opportunities worth investing in, Chairman, President and CEOWarren Buffett said April 30.
Buffett at the conglomerate's annual meeting mounted adefense of his acquisition strategy, arguing that Berkshire needs to buyincreasingly large acquisition targets to make a dent in its bottom line. Thathas meant wading into areas that are more regulated and more expensive than thecompany might have considered several years ago.
"It's one of the problems of prosperity," Buffettsaid in response to a shareholder's criticism that Berkshire is straying fromits core ideologies. "We'd love to find one that we could buy for $20[billion] or $30 billion that was not capital intensive, and we may, but it'sharder to find, and that does hurt us in terms of compounding earnings growth."
He added that Berkshire had long committed to investing onlyin high-return businesses such as candy manufacturer and distributor See'sCandies, but the company "slowly and reluctantly" shifted itsperspective based largely on the types of targets available to purchase.
"When our circumstances changed, we changed ourminds," Vice Chairman Charles Munger said. "And plan B is workingvery well. In many ways, we've gotten to where I kind of prefer it."