Sunday, December 2, 2007

Warren Buffett's Video Tour of Berkshire Hathaway Headquarters Continues: Why 'Durable Competitive Advantage' Matters

Buffett: The picture of the Berkshire is right here. Here we are. Nice orderly office, and right up there is a photo of the big Hathaway Mill in New Bedford, Mass. That was there in 1960, well, I bought the first stock in '62, then in '65 when I took control, now it was over a million square feet. It had probably 50 million dollars of replacement value of machinery and equipment in there. When we finally gave up on the textile business 20 years later, we got less than $200,000 sold for scrap iron. And for that building which is over a million square feet, I got minus $250,000. I have to give up money. So that's, it shows you that gap accounting figures and fixed assets and all that, really don't mean much. It's much better on the Coca-Cola trademark than it is on a bunch of buildings and machinery.

Becky: You know, I never thought about it before, but part of what we're focusing on is just the idea of you going global and looking around and that's an early example of globalization and how it changed your investment theory.

Buffett: In the early, a century plus ago, if you lived in New England, you measured your wealth by looms and bobbins just like people in the Midwest measured their wealth by acres of land. And it turned to dust, basically.

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