Buffett: Stocks Not Overvalued

Billionaire investor Warren Buffett said Saturday that Berkshire Hathaway Inc., the giant holding company he manages, continues to sell stock, but he wrote that “there is no reason to think of stocks as generally overvalued” as long as interest rates hold steady or decline and corporate returns on equity remain high.

Last year, stocks fell on the Monday after the weekend release of Buffett’s annual letter, in which he said “virtually all stocks” were too high and that markets were “overheated.”

Observers noted that stock in McDonald’s restaurants is no longer in the portfolio. Last year, Buffett surprised shareholders when he doubled Berkshire’s holdings in the fast-food giant.

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Excerpts from Buffett’s letter will appear Tuesday in The Times’ Wall Street, California pages.