Arson, Warren, Michael Mabaso discussed on Invest Like the Best

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Have you have french's mustard whatever the brand was worth a lot that source of independent vantage is is sort of a roading and you look at their fifty two week lows of the brands over the last couple of months they're struggling because brand doesn't mean much anymore word of mouth beans warren to the millennial generation and younger they're not as hooked on getting a pint sir hans or whatever they want some product that easy's you know using or something you know it's a different it's a different world today and they're struggling with that but those are the basically the buckets that you look to find something that allows you to get enough of a buried a competition to get you the most important thing in business buffet says the most important thing in business is does the business have pricing power if you don't have any pricing power you're in a tough situation yeah i always loved that litmus test because it straightforward some of the sustainable order forces stuff and sustainable competitive advantage both qualitatively and quantitatively is so hard to pin down but pricing power is pretty straightforward what would happen if you raise prices prayer meeting here's one of my other mentors michael mabaso who was introduced to me by michael arson who's a guy who works and manages one of the best investors in the world and least well known it cascade he manages the gates foundation money and huge pool of money but he's a fantastic investor but he entered we've just me to mob son and mabaso has his classic memo on basically essay on measuring the moat and basically what he's saying is is what creates the mode is quantitative and it's an art and it's a skill and it's dynamic and you have to do it but the test is quantitative and so you know you have it because you can measure it by roi and sustain roi over the years sustain ro years generated the fact that you have some pricing power and you're not just selling a commodity product and so michael's work has been sort of clarifying for me in the sense of the qualitative side of businesses about creating the moat and the quantitative side is about measuring it and keeping the two buckets in separate places mentally as hell.

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