WATCHING WEB; BUFFETT KEEPS WARY EYE ON INTERNET.

Byline: Joe Ruff Associated Press 

For years, multibillionaire investor Warren Buffett has shied away from computer companies, saying he invests only in companies he understands.

Now, as the Internet becomes more dominant in the U.S. economy, the Berkshire Hathaway Inc. chairman is waiting to see how businesses that catch his eye find their conventional ways of doing business challenged by the Web.

``Anytime we buy a business we look at what it will be like in five to 10 years,'' Buffett told 15,000 shareholders Monday at the investment company's annual meeting.

``In some cases, the Internet is such a threat we wouldn't want to get into it,'' he said. He noted that the automobile retailing will change dramatically as more people go online.

Buffett also forecast that businesses with trusted brand names, such as Berkshire-owned Borsheim's jewelry, should benefit from the Internet.

``Brand names are going to mean very, very much to people among the thousands of names offered on the Internet,'' Buffett said. ``I don't see them going for Brand X and buying fine jewelry over the Internet.''

Buffett and Berkshire Vice Chairman Charlie Munger fielded dozens of questions ranging from accounting practices to investment strategies of Berkshire-owned insurance companies General Re and Geico.

More than 14,000 shareholders packed the AKsarben coliseum for the annual meeting, which features a six-hour question-and-answer session with Buffett and Munger. Still more stockholders listened to Buffett's comments via a large-screen television set up at a local hotel.

In the halls surrounding the coliseum, Buffett-owned businesses sold candy and Dairy Queen ice cream, and Geico agents even issued insurance rate quotes for those interested.

Berkshire, which had $2.8 billion in net earnings last year, needs large investments if they are to have any impact on earnings growth for the company, Buffett said.

Known for investing in companies he likes and holding the stock indefinitely, Buffett's estimated wealth of more than $29.4 billion makes him the second-richest man in America behind Microsoft Corp. chairman Bill Gates at $58 billion.

Last year, while Buffett was vacationing with Gates at Yellowstone National Park, he made a bid for Long-Term Capital Management, a Connecticut-based hedge fund that was in financial trouble. The hedge fund turned down the bid, and Long-Term Capital was rescued by a consortium of financial institutions.

Buffett, who owns stock in companies like Coca-Cola and Gillette, also said he would not invest in computer companies, including Microsoft, because he cannot comfortably predict where they will be in 10 years.

``I think it's much easier to predict the relative strength that Coke will have in the soft drink world than Microsoft will in the software world,'' Buffett said. ``That's not to knock Microsoft. If I had to bet on anyone, I'd bet on Microsoft. But I don't have to bet.''

IMPRESSIVE RESULTS

Since May 1990, shares of Warren Buffett's Berkshire Hathaway Inc. have greatly outperformed the S&P 500, the industry benchmark:

Date Berkshire Hathaway S&P 500

May 30, 1990 7,150 361.22

May 3, 1999 75,900 1,354.63

CAPTION(S):

2 Photos, Chart

PHOTO (1--Color) Warren Buffett, left, on Sunday kicks off Monday's meeting of Berkshire Hathaway shareholders.

Dave Weaver/Associated Press

(2--Color) ``Brand names are going to mean very, very much to people among the thousands of names offered on the Internet. I don't see them going for Brand X and buying fine jewelry over the Internet.''

- Warren Buffett

Chairman, Berkshire Hathaway Inc.

CHART: IMPRESSIVE RESULTS (see text)

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