35: Buffett's Subtle Lesson On Moats; James Webb Telescope
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Buffett On Moats
Over at my YouTube Channel, I’m working my way through the BRK AGMs, picking out some of the best clips from years past. Below is one of just three I’ve added to a cream of the crop playlist.
The clip is a gem and is worth watching in its entirety. Here are my main bullets:
Think of share of mind, not share of market.
Speaking of Disney (1:48), Buffett is talking about search costs. Any parent can pull a Disney movie off the shelf and be certain it’s wholesome family entertainment. A parent isn’t going to preview hours of competitors’ movies.
Buffett at 2:45 echos Jeff Bezos in asking ‘what won’t change?’
“You never know which dollar is doing it” Buffett quoting an old Coke report (6:08) on advertising; he’s talking about maintaining a moat
Munger (8:45): The name of the game is continual learning
Munger’s joke about aging executives (9:00)
Buffett on how they learned from See’s. (10:00). This is a very subtle but important point. Buffett and Munger had a front-row seat via their ownership of See’s to understand consumer product companies, which led to their purchase of KO shares. Not all investors have direct experience in operating businesses which, if you’re humble, you’ll recognize as a handicap. I’m not sure it’s possible to get all that experience from the outside. Perhaps it is by following a company closely for years, reading executives’ writings, and listening to the conference calls. It’s not easy. I was lucky to spend over a decade in commercial lending, including during the Great Recession of 2008/9, but even this experience has its limits.
James Webb
Thanks to my good friend, Robert, for sharing this with me. This is an incredibly exciting time to be alive!
Stay rational! —Adam
