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.
If your customer base is aging with you, then eventually you are going to become obsolete or irrelevant. You need to be constantly figuring out who are your new customers and what are you doing to stay forever young.
No young kid growing up dreams of someday becoming a businessman. He wants to be a fireman, a sponsored athlete or a forest ranger The Lee Iacoccas, Donald Trumps, and Jack Welchs of the business world are heroes to no one except other businessmen with similar values.
Customer satisfaction is worthless. Customer loyalty is priceless.
Because its purpose is to create a customer, the business enterprise has two - and only these two β basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are 'costs'.
Why should a manufacturer bet his money, perhaps the future of his company, on your instinct?
The sooner you cut off negotiations with someone you shouldn't be dealing with, it gives you the chance to move on to a more profitable deal.
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