Warren Buffett: What I do know
Today's Oracular Wisdom:
"'Buy commodities, sell brands' has long been a formula for business success. It has produced enormous and sustained profits for Coca-Cola since 1886 and Wrigley since 1891.
"I understand a Wrigley or a Mars a whole lot better than I understand the balance sheet of some of the big banks.
"I don't know what oil or wheat or soybeans or cocoa or anything like that's going to be selling for next week or next month or next year.
"I do know people are going to be chewing Wrigley gum and eating Mars bars."
– Warren Buffett
Today's Oracle Bio:
I managed to hold off for two weeks before quoting the original investing oracle, the Oracle of Omaha: Warren Buffett.
Buffett is perhaps the most legendary investor of all time. He was entrepreneurial from a young age and earned around $175 a month delivering newspapers. He bought his first stock at age 11, in 1941: six shares of Cities Service Preferred stock at $38 per share. He was terrified shortly thereafter when it plunged in value.
By the time Buffett started his investment partnerships in 1956, at age 26, his personal savings had grown to over $135,000. That's equivalent to about $1.6 million today. He is now the fifth richest person in the world, with a net worth of $155 billion (8 April 2025).
Book Highlight:
My favourite book about the greatest of all time is Buffett: The Making of an American Capitalist by Roger Lowenstein. It dates to 1996 but does a fantastic job of covering Buffett from his childhood through to his success amassing one of the epochal fortunes of the twentieth century.
Learn more about this book. (Affiliate link)
For more recent insights, I also highly recommend the words of Warren Buffett himself. Every year, he includes an essay with his thoughts on business and finance at the beginning of Berkshire Hathaway's annual report. Just go to the company's reports webpage to download the free reports and read the letters.
My Thoughts:
In this quote, Buffett touches on two of his most enduring themes: the moat of strong brands and the pursuit of simplicity in investing.
Buffett favors simple, understandable businesses over complex financial or technological companies. After famously resisting any major U.S. tech stocks, he finally persuaded himself to buy a significant stake in Apple in 2016. But, he bought it not on the strength of its smartphones. Instead, he liked its powerful and trusted consumer brand.
Buffett believes that powerful brands create an economic moat that protects them from competition and boosts profitability.
By the way, Warren Buffett talks about Mars and Wrigley here. He spent $6.5 billion to help Mars acquire Wrigley during the 2008 financial crisis. By the time Mars finally bought Buffett out, his return was more than double that initial investment.
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