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Author: WayneOwl Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 46814  
Subject: Re: 101: Industry dynamics : Pricing power Date: 5/8/2005 11:19 AM
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Cogitarius:

So yes, Buffett has immense pricing power, but doesn't actively exercise it to influence the dynamics of a particular industry or company.

Are you saying Buffett is not very smart? Or that he doesn't care about maximizing profit for his shareholders in the long run? When I 'take a read' on the man, neither of those assessments is possible.

I think he does play a part in managements' plans to use 'pricing power' as effectively as possible. It seems to me that to do otherwise would be a failure of his fiduciary duty and we know how he feels about that. ( Of course, discussions with management and other board members about "strategy" are obviously, and must be, very private conversations - I wouldn't expect to read about them ).

I also wouldn't expect him to discuss those things in public except in the generalizations that were quoted. Mr. Buffett, despite his obvious talents, still puts his pants on one leg at a time like the rest of us and is subject to the same human emotions.

I cannot prove my assessment is correct. It is an hypothesis.

Psychoinvest:

I agree with your comments but I think we are discussing different things. I was writing about "pricing power" for the products of a company after he takes a stake in it; not how he goes about obtaining part of the company.

Wayne


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