Buffett Quotes on Good Business

1. Good businesses are difficult to knock off

Snickers has been the #1 candy bar for the past 40 years. If you gave me $1 billion to knock off Snickers, I can’t do it. That’s the test of a good business. You don’t knock off Coke or Gilette. Richard Branson is a marketing genius. He came in with Virgin Cola, we’re not sure what the name means, perhaps it turns you back into one, but he couldn’t knock off Coke.

Source: Emory’s Goizueta Business School and McCombs School of Business at UT Austin

2. Good businesses have pricing power

When we invest we ask one question, how long do you have to wait to raise the prices?

Source: Student Visit 2007

3. Good businesses earn high return on tangible assets

It[Coca-Cola] has $5-6 billion of tangible assets and makes a similar amount of pre-tax earnings. There are not a lot of big businesses that earn 100% returns on tangible assets.

Source: BRK Annual Meeting 2006 Tilson Notes