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

To: Shane M who wrote (673)	12/11/1998 12:17:00 PM
From: James Clarke	Respond to of 4691

<<I like the business. People have to park cars or find alternate transportation. I'd think demand is fairly inelastic here. Competition can't just spring up across the road, because in many cases there's no place to build a new parking lot/garage. And it doesn't do the competition much good to build several blocks down because location is key.>> I would have to agree with this very simple analysis - the simpler the better with a Buffett business. I think about where I park my car. Its the only enclosed lot near the train station, and I look at the cost as just a fact of life - i.e. they have pricing power. Yet it is a business that any idiot can run, if you've got the right location. There can't be much reinvestment required either. But when you aggregate it into a company trying to consolidate the industry, that's a different dynamic. I'd want to look at the price they can acquire these assets for, and what value scale adds to what is essentially a local business. (For self storage, its a brand and a national 800 number that they add - for parking I'm not seeing why bigger is better.) Jim