主题： Other Businesses

The internet as a phenomenon is just huge. That much I understand. I just don’t know how to make money at it.… I don’t try to profit from the Internet. But I do want to understand the damage it can do to an established business. Our approach is very much profiting from lack of change rather than from change. With Wrigley chewing gum, it’s the lack of change that appeals to me. I don’t think it is going to be hurt by the Internet. That’s the kind of business I like.

The internet was going to change our lives, but it didn’t mean that every company was worth $50 billion that could dream up a prospectus.

Our textile business—that’s a business that took me 22 years to figure out it wasn’t very good. Well, in the textile business, we made over half of the men’s suit linings in the United States. If you wore a men’s suit, chances were that it had a Hathaway lining. And we made them during World War II, when customers couldn’t get their linings from other people. Sears Roebuck voted us Supplier of the Year. They were wild about us. The thing was, they wouldn’t give us another half a cent a yard because nobody had ever gone into a men’s clothing store and asked for a pin striped suit with a Hathaway lining. You just don’t see that.

Three suggestions for investors: First, beware of companies displaying weak accounting…. When managements take the low road in aspects that are visible, it is likely they are following a similar path behind the scenes.… Second, unintelligible footnotes usually indicate untrustworthy management. If you can’t understand a footnote or other managerial explanation, it’s usually because the CEO doesn’t want you to. Enron’s descriptions of certain transactions still baffle me. Finally, be suspicious of companies that trumpet earnings projections and growth expectations. Businesses seldom operate in a tranquil, no-surprise environment, and earnings simply don’t advance smoothly (except, of course, in the offering books of investment bankers).… Managers that always promise to “make the numbers” will at some point be tempted to make up the numbers.

In the world of business, bad news often surfaces serially: You see a cockroach in your kitchen; as the days go by, you meet his relatives. We’ve got, I don’t know how many, 30 companies we own stock in or something like that. I will guarantee you there’s something going wrong at almost every one of them. I mean, it’s not my job to run those companies. It is my job to determine, when something goes wrong, whether it’s going to be permanent.

We have never, that I can think of, bought into start-ups or anything of the sort…. I love what they’re coming up with, but I don’t bring anything to that game at all. And the valuations tend to be, you know, nosebleed by our standards. I want to buy very big, very solid businesses that I know will be around for 50 or 100 years, and buy them at a reasonable price, have a manager run them, and then just, you know, go back to drinking Coca-Cola and eating some peanuts.

Our see’s candy is now $11 a pound thanks to my brilliance.… Let’s say there’s candy available at $6 a pound. Do you really want to walk in on Valentine’s Day and hand—I mean your wife has all these favorable images of See’s candies over the years, … and say, “Honey, this year I took the low bid,” and then hand her a box of candy? It just isn’t going to work.

Coca-Cola is associated with people being happy around the world … : Disneyland or Disney World, at the World Cup, or at the Olympics—every place that people are happy. Happiness and Coke go together. Now you give me—I don’t care how much money—and tell me that I’m going to do that with RC Cola around the world and have 5 billion people that have a favorable image about RC Cola? You can’t get it done.… And that’s what you want to have in a business.

Cola has no taste memory. You can drink one of these at nine o’ clock, eleven o’ clock, three o’ clock, five o’ clock—the one at five o’ clock will taste just as good to you as the one you drank earlier in the morning. You can’t do that with cream soda, root beer, orange, grape—you name it. All of those things accumulate on you.… You get sick of them after a while.… And that means that you get people around the world that are heavy users, that will drink five a day or [with] Diet Coke maybe seven or eight a day or something of the sort. They’ll never do that with other products, so you get this incredible per capita consumption.

If you walk into a drugstore, and you say “I’d like a Hershey bar” and the man says “I don’t have any Hershey bars, but I’ve got this unmarked chocolate bar, and it’s a nickel cheaper than a Hershey bar,” you just go across the street and buy a Hershey bar. That is a good business.