Warren Buffett: The Importance Of Having A Circle Of Competence

Transcript

What’s on your mind and the you’re going to ask anything. The only thing I will tell you is what we’re buying or selling are about. The. Same but. I don’t need to tell myself that. I mean I write it down. It’s like the Coca-Cola formula you know there’s only two people can get into the. Trust department and find out what they are and I don’t know who the two are. It’s you don’t talk about what we’re buying or selling but anything else is fair game. Personal Business anything you’d like to talk about. And actually the tougher the questions are the more interesting it is for me so don’t don’t spare my feelings I may just throw up my head. And with that let’s guess we’ve got a microphone. Is this the only microphone or is there one on this if you like.

OK. Here like to stay on the line. And I’ll be Regis Philbin and you can. Also. I believe that I can only should expect to make money and things that I understand and when I say I understand I don’t even understand. What.

The product does or anything like that. I mean I understand what the economics of the business are likely to look at look like 10 years from now or 20 years from now. I know in general what the economics of say Wrigley chewing gum will look like 10 years. Now. The internet isn’t going to change the way people chew gum. It isn’t going to change which come true. You know if you own the chewing gum market. In a big way and you’ve got Doublemint spearmint Juicy Fruit those brands will be there 10 years from now. So I can Tandan point exactly what the numbers are going to look like on Regli but I’m not going to be way off if I try to look forward on something like that that evaluating that company is within what I call my circle of competence. I understand what they do. I understand the economics of it I understand the competitive aspects of the business. There can be all kinds of companies that have wonderful futures but I don’t know which ones they are.