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Strategies & Market Trends : Buffettology -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (3143)	12/5/2002 5:53:31 PM
From: dvdw©	Read Replies (1) \| Respond to of 4691

Hi Paul, didnt mean to pigeon hole Berkshire that way. IMO a Demand Business is a business that a broad slice of the population has to do business with because of necessity of making choices about it every day, week, month, or year. Insurance isnt optional. Furniture isnt optional, food and drink are not optional, shaving isnt really optional. These are Demand business because they Demand your attention. Technology is always a choice, the payoff being some form of increased productivity, lower costs of goods, or even SGA etc etc. A Business can funtion with Inferior systems, based on a whole range of issues, government guarantees, product or market efficiencies, competitive barriers to entry, etc etc. An order book can be done with pad and paper or palms, that kind of choice is more a factor of perception and integration with the corporate culture as anything else. We 've just seen Venture backed fortunes, destroyed by a business cycle that does not forgive skipping over the basics. Buffetology is about the basics first and systematicly enhancing the fundamentals from the basics outward. The failure of all these bubble companies was in squandering opportunity by Proclaimation. This is manifest by "We're the best because we've arrived mentality", ignoring the basic business ideas that make a good business good. What intrigues me about Berk is the fact of scarcity of it's float, which I've believed for the longest time is not a welcome condition by the street, yet it's an undeniable critical feature of this company, which accounts in part for it's market price. What say you?