Warren Buffett MBA Talk – Part 4 Wednesday, October 10, 2007
Posted by ei-forum in Buffett MBA Talk.trackback
Once an investor has grasped the concept of investing in a business that he can understand, the focus should move to valuing what a fair price for the business would be… but, surprisingly enough, it’s not only about the numbers.
Despite being a value investor and a disciple of Graham, Buffett made his fortune by understand that there was an extra piece of the puzzle. He started adding another variable to the idea of ‘margin of safety’ and that is, the overall and longterm potential of the brand which he summarized in Part 3 as share of mind not share of market.
In this part of his talk, he discusses his acquisition of See’s Candies , the brand, business model and longterm potential. He perfectly outlines the compounding value of margin of safety linked to share of mind. He than also goes on to further make his point by using Disney as another example in the DVD market.
Enjoy:
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