In a commodity business, it's very hard to be smarter than your dumbest competitor.
Interpretation
In highly competitive markets, it's challenging to outperform competitors who may not have the same level of intelligence or strategy.
Warren Buffett's quote highlights the difficulty of excelling in a commodity business where products are similar and competitors may not apply intelligent strategies. It suggests that in such environments, even those who are less knowledgeable can succeed, making it essential for businesses to innovate and differentiate themselves rather than relying solely on being smarter than their competitors.
In practice
In a business conference discussing market competition.
I have no views as to where it will be, but the one thing I can tell you is it won't do anything between now and then except look at you. Whereas, you know, Coca-Cola (KO) will be making money, and I think Wells Fargo (WFC) will be making a lot of money and there will be a lot - and it's a lot - it's a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that.
If the world couldn't see your results, would you rather be thought of as the world's greatest investor but in reality have the world's worst record? Or be thought of as the world's worst investor when you were actually the best?
Cash never makes us happy, but it's better to have the money burning a hole in Berkshire's pocket than resting comfortably in someone else's.
I think you should read everything you can. In my case, by the age of 10, I'd read every book in the Omaha public library about investing, some twice. _x000D_ You need to fill your mind with various competing thoughts and decide which make sense.
The most common cause of low prices is pessimism - some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It's optimism that is the enemy of the rational buyer.
Oneβs objective should be to get it right, get it quick, get it out and get it over. Your problem wonβt improve with age.
Cutting prices or putting things on sale is not sustainable business strategy.
Companies that get confused, that think their goal is revenue or stock price or something. You have to focus on the things that lead to those.
Part of company culture is path-dependent - it's the lessons you learn along the way.
There are good examples of companies - Coca-Cola is one - that invested before there was a huge market in countries, and I think that ended up playing out to their benefit for decades to come.
Customers should be number 1, Employees number 2, and then only your Shareholders come at number 3.
Businesses fail when they over-invest in what is at the expense of what could be.
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