Buffett: Berkshire Hathaway looking to deal

OMAHA, Neb. (FORTUNE) -- Berkshire Hathaway is ready to make a deal at the right price, but it has nothing in its shopping cart right now, CEO Warren Buffett said Sunday.

Buffett, the billionaire investor who runs the conglomerate, said Berkshire has $20 billion in cash and is "perfectly willing to make a deal that's compelling" should one arise. The comments come after Berkshire spent the second half of 2008 scooping up assets at reduced prices as a result of last fall's financial panic.

Neither Buffett nor Vice Chairman Charlie Munger would specify any industries or geographic regions where Berkshire might be particularly inclined to do a deal. Both said the company isn't currently planning to issue new shares or bonds to pay for a big acquisition.

The comments come as Berkshire wrapped up its annual shareholder meeting, which Buffett and Munger spent explaining the company's performance last year and how they see its prospects for coming years. Both said they expect the troubles that laid the markets low last year to pay off for Berkshire shareholders in the future.

Berkshire last year posted its biggest decline in net worth since Buffett took over more than 40 years ago. The firm's value dropped nearly 10%, as plunging stock markets hit Berkshire's investment portfolios and Buffett, by his own account, erred in his decisions, including the one to buy oil company ConocoPhillips (COP, Fortune 500) just before the price of oil collapsed last summer.

Even worse for shareholders, the company's shares dropped during 2008, giving back several years of appreciation. The trend in 2009 hasn't improved much: Berkshire shares are down 5% this year and 31% from a year ago.

But despite frequent references this weekend to Buffett's own mistakes - a video shown Saturday morning to kick off the shareholder meeting depicted him as having been demoted to mattress salesman by Berkshire's board - it is clear that Berkshire isn't dwelling on last year's performance.

Asked Sunday whether Berkshire had been, in Buffett's parlance, caught swimming naked when the tide ran out, Munger replied that those judging the firm's performance by short-term swings in its stock are acting like fools.

"If you think we're in trouble because the stock price went down, you don't understand what's going on," he said.

He added that Berkshire has been running what he described as "Andrew Carnegie's playbook" - referring to the steel tycoon's practice of grabbing market share from weakened competitors that run short of cash during economic downturns.

Along similar lines, Berkshire made multibillion-dollar preferred stock investments in blue-chip companies such as Goldman Sachs (GS, Fortune 500) and General Electric (GE, Fortune 500) last fall, when both were in need of cash and an expression of confidence from the world's most renowned investor.

Despite the recent decline in Berkshire shares, it seems clear that Berkshire shareholders aren't hurting.

Buffett said sales of See's Candy at the meeting surged to $180,000 this weekend, up from $160,000 last year and $100,000 in 2007. Berkshire's Geico unit sold 68 car insurance policies during the three day event - sales that will cover the costs of the annual meeting, Buffett said. Attendance was estimated at 35,000 people, up from 31,000 last year and 12 in 1981, Buffett said.

Those figures show Berkshire has been doing something right, Buffett said.

"We're not paying people to come here," he said.