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Buffett Cautions Investors

March 15, 1997|From Associated Press

Warren Buffett, a legendary investor and one of the world's richest men, is advising caution to those tempted by the stock market's stampede higher.

He described the market as overheated in his annual letter to shareholders of his Berkshire Hathaway Inc. investment company, according to a report by Dow Jones News Service.

"You can, of course, pay too much for even the best of businesses," Buffett wrote in his annual report. "The overpayment risk surfaces periodically and, in our opinion, may now be quite high for the purchasers of virtually all stocks. . . ."

"Investors making purchases in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding company to catch up with the price they paid," he said in the letter.

Berkshire Hathaway was planning to make the letter public today on the Internet, a first for the company. (

The report also detailed the major holdings of Berkshire Hathaway as of the end of last year. It includes stakes of 15.8% in Washington Post Co., 10.5% in American Express Co., 8.1% in Coca-Cola Co. and 8.6% in Gillette Co., Dow Jones said.

Because of Buffett's reputation as a shrewd investor, his annual letter is eagerly awaited on Wall Street.

He said investors should increasingly look to the Internet for his future pronouncements.

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