Buffett tells flock: Lower sights or sell Berkshire

By Jonathan Stempel

OMAHA, Nebraska (Reuters) - Warren Buffett told shareholders of his Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research, Stock Buzz) (BRKb.N: Quote, Profile, Research, Stock Buzz) not to expect the out-sized gains his insurance and investment company has historically enjoyed, but they could still sleep well owning its stock over the long haul.

"There is absolutely no question" that Berkshire's returns will decline, Buffett said. "Anyone that expects us to come close to replicating the past should sell their stock. It isn't going to happen. I think we're going to get decent results over time, but we're not going to get indecent results."

The world's richest person offered his warming on Saturday at Berkshire's annual meeting in the Qwest Center in downtown Omaha, before what he called a record 31,000 shareholders.

Through 2007, Berkshire had grown 21.1 percent a year since Buffett took over what was a failing textile maker in 1965. That is twice the gain in the Standard & Poor's 500 .SPX, including dividends. A Berkshire share that fetched about $12 in 1965 captures $133,600 now. A Class B share costs 1/30th as much.

Berkshire has become a behemoth, with a roughly $207 billion market value and $281 billion asset base that makes it harder for any one business or investment to move the needle.

Shareholders, including new ones, seemed understanding.

"I think it's a steady stock. That's why I bought it," said Jane Hoffer, 53, a middle school cafeteria worker from Lincoln, Nebraska who said she bought her 11 Class B shares in the last year. "I want something I can buy and keep and know that it's not going to go bad."

Buffett and Vice Chairman Charlie Munger spent five hours fielding questions from shareholders. One, a nine-year-old boy, asked if they would buy the Chicago Cubs baseball team from Sam Zell's Tribune Co. (Buffett said, in so many words, no.)