Buffett's Investing Secret Will Make You Smack Your Forehead (BRK.a)
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Price: $493.80 -0.18%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 0.9%
EPS Growth %: +8.7%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 0.9%
EPS Growth %: +8.7%
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The Oracle of Omaha has his own brand of investing style that's world-renowned for success...but it may not be what you think.
Throw out the technicals, and forget most of the fundamentals, Buffett's latest winning strategy may just be based on simple principles brought about in Economics 101...can you increase the price without risk of losing your customer base?
That's right, Buffett likes the pricing power of the company more than, say, the management. In a statement released from a Financial Crisis Inquiry Commission, Buffett said, "The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business."
Continuing, Buffett said, "The extraordinary business does not require good management."
The statements were made as the FCIC inquired about Buffett's investment in Moody's Corp. (NYSE: MCO), of which Buffett said that he knew nothing about the management of Moody's.
Looking at Buffett's recent $26.5 billion buyout of Burlington Northern Santa Fe, which has 30,000 million of rail across the western U.S. connecting coal, grain, and consumer goods producers, and you'll see the correlation.
Related Stocks:
Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B)
Throw out the technicals, and forget most of the fundamentals, Buffett's latest winning strategy may just be based on simple principles brought about in Economics 101...can you increase the price without risk of losing your customer base?
That's right, Buffett likes the pricing power of the company more than, say, the management. In a statement released from a Financial Crisis Inquiry Commission, Buffett said, "The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business."
Continuing, Buffett said, "The extraordinary business does not require good management."
The statements were made as the FCIC inquired about Buffett's investment in Moody's Corp. (NYSE: MCO), of which Buffett said that he knew nothing about the management of Moody's.
Looking at Buffett's recent $26.5 billion buyout of Burlington Northern Santa Fe, which has 30,000 million of rail across the western U.S. connecting coal, grain, and consumer goods producers, and you'll see the correlation.
Related Stocks:
Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B)
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