The worlds of investing and business have changed, making it tougher to buy good companies and giving rise to huge businesses that are based on ideas, not manufacturing plants, Warren Buffett and Charlie Munger said Saturday.

The two leaders of Berkshire Hathaway Inc. told shareholders at Omaha’s CenturyLink Center that they are coping with those changes and that Berkshire still has advantages. They also talked about the next Berkshire CEO, investments they missed and the company’s future.

Munger, who is vice chairman of Berkshire, said, “The general field of buying whole companies has gotten more competitive,” making it difficult for Berkshire to find affordable businesses to add to its dozens of operating companies.

Private-equity firms, which raise money to buy companies, make changes and then sell them again, often borrow heavily and end up paying high prices and weighing down the purchased companies with debt.

Buffett, the chairman and chief executive of Berkshire, said he offers fair prices for companies from owners who want to continue running their companies and can’t bear to see them purchased, altered and resold by private-equity firms.

Some owners tell him, “It isn’t that you’re so special. It’s just that there isn’t anybody else.”

If an owner is more interested in the money than the business, Buffett said, it’s likely not a good fit for Berkshire.

The two executives spoke at Berkshire’s annual shareholders meeting, which was expected to attract more than 40,000 people to Omaha. They spoke for more than five hours, often drawing laughter.

Late in the meeting Munger, a California resident, said, “All I can say is, my back hurts and I come to these functions to indicate to the shareholders that they’ve probably got seven more good years to get out of Warren.”

Buffett is 86, Munger is 93.

At one point Buffett indicated that Berkshire could grow substantially over the next decade if interest rates increase.

But Munger said Berkshire’s future growth will be “less glorious than in the past. We keep saying that, and now we’re proving it,” he said. Berkshire’s growth averaged 21 percent a year for its first 42 years under Buffett but 8.7 percent in the decade since.

Because Berkshire raises billions in cash — currently about $96 billion on hand — it has grown by investing that money into existing businesses, besides acquiring other businesses or investing in other publicly traded companies.

“I would say it’s getting harder and harder to predict returns than it was 20 or 30 years ago,” Buffett said.

Buffett noted that Apple, Microsoft, Amazon, Facebook and Google’s parent company, Alphabet — companies without significant physical assets — have a combined market value of $2.5 trillion, nearly 10 percent of all the publicly traded companies in the United States.

Businesses like Amazon don’t require big capital investment. “People do not appreciate that change,” Buffett said.

Munger said Buffett’s willingness to invest in Apple last year was a good sign for Berkshire’s future. “Either you’ve gone crazy or you’re learning,” Munger said. “I prefer the learning explanation.”

Buffett said he views Apple as a consumer goods company with a strong technology component and loyal customers.

He said he missed a chance to make early investments in Google and Amazon because he couldn’t foresee their success. “It’s harder to predict the winners” in new technology-based businesses, he said, although Berkshire has had success with other investments.

He praised Amazon founder Jeff Bezos. “I was too dumb to realize that was going to happen. I admired him, but I didn’t think he could succeed on the scale that he has.”

A shareholder noted that Apple gave the world important products and Amazon has improved the way people buy products, and then asked what value Berkshire brings to the world. Since Buffett’s practice is to allow its business managers to run their own operations, the shareholder said, wouldn’t those managers run their businesses just as well outside Berkshire?

Buffett said Berkshire adds value by giving managers that operating freedom so they can focus on long-term success. “They can spend all their time figuring out the best way to run their business. We bring something to the party even if we just sit there with our feet up on the desk.”

Berkshire also distributes its capital, he said, providing money for growth without having to borrow.

That’s been on display as Omaha-based Nebraska Furniture Mart has expanded with its Texas store. Backed by Berkshire, the Mart is developing a huge retail and lifestyle center near Dallas.

Munger said he and Buffett learned more from some terrible businesses they owned decades ago than they learn from the good businesses Berkshire owns now.

“A life properly lived is learning, learning, learning all the time,” Munger told the shareholders. “If we hadn’t been continuously learning, you wouldn’t be here.”

Buffett said the single most important factor in economic growth for many businesses is interest rates. In response to a shareholder question, he said a 10 percent average annual growth rate by Berkshire “might be doable.”

But it’s not easy to predict where interest rates will go, he said, and Berkshire also must find larger and larger businesses to match its earlier rates of growth because the company grows larger every year.

Asked about Berkshire’s succession plan, Buffett said his successor must be someone with a “money mind” who is “wired” to understand and carry out business deals.

He said when he leaves the job of CEO, either by retiring or dying, he thinks Berkshire Hathaway’s stock price will increase as people speculate that the company might be broken into pieces.

But he said an intact Berkshire is worth more because of its advantages, such as a ready supply of capital from its insurance operations to support other businesses.

Buffett takes a $100,000-per-year salary and has nearly all his wealth in Berkshire Hathaway stock, while his successor may not be in the same financial situation.

Asked about compensation for the next Berkshire CEO, Buffett said one possibility would be that the person would be about 50 years old and already be wealthy and not need a large compensation.

Buffett said the compensation for the next CEO might consist of a salary and, if necessary, stock options that would increase in cost each year to reflect the growing value of Berkshire.

Other comments:

» Munger said capitalism can be “brutal” to people whose skills are outdated by automation or whose jobs end up in lower-wage countries. But society benefits from improved productivity and should help people in those situations.

» Buffett said he cut back on Berkshire’s investment in IBM by about one-third because the company has been “a significant laggard” since he purchased the shares in 2011.

» Buffett said Berkshire became the biggest shareholder in the nation’s four biggest airlines — United, Southwest, Delta and American — because they are less likely to run into the financial problems of the past, although the air travel industry is “no cinch.”

» Berkshire has a slight preference to take investment losses now because the tax benefit may be greater than later, if the federal government lowers corporate tax rates.

» Berkshire gets about 4,000 tips a year on a hotline for employees to report misconduct, and a few times there are serious problems that require fixing. Buffett relies on managers to conduct business properly, but the hotline is an effective way to find out early about misconduct and fix it, he said.

» Berkshire is practically the only company that can handle large reinsurance contracts, Buffett said, because of its financial strength and because of the abilities of Ajit Jain, president of the company’s insurance division.

» Munger said China may have better investment opportunities than the United States. “It’s a happier hunting ground.”

» Buffett said he doesn’t foresee a problem that would cause serious trouble for Berkshire unless it was an attack by a weapon of mass destruction or something else that seriously disrupts society. If that happens, he said, “all bets are off.”

Berkshire shareholders rejected shareholder proposals requiring the company to report on its political contributions and campaign activities, to report on methane emissions and pipeline leaks and to sell off its fossil fuel holdings.

The Berkshire board recommended voting against the proposals, saying the company follows all regulations on political contributions, pipeline leaks and fossil fuels and that the reports and sell-off aren’t wise.

The fossil fuel proposal was from the Nebraska Peace Foundation.

World-Herald staff writer Barbara Soderlin contributed to this report.

The Omaha World-Herald is owned by Berkshire Hathaway Inc.