![]() ![]() You’ll probably know more about the industry than most of the people in it when you get through, because you’ll bring an independent perspective to it, and you’ll be listening to everything everyone says rather than coming in with these preconceived notions and just sort of listening to your own truths after a while. You know, who would they use the silver bullet of Andy Grove’s on and so on, you’re going to learn a lot about it. I did that with American Express back in the ’60s and essentially the scuttlebutt approach so reinforced my feeling about it that I kept buying more and more and more as I went along.Īnd if you talk to a bunch of people on an industry and you ask them what competitor they fear the most, and why they fear them, and all of that sort of thing. Or maybe, if you confirm it, maybe do it even more strongly. I mean, you don’t want to get too impressed by that, because you really want to start with a business where you think the economics are good, where they look like seven-footers, and then you want to go out with a scuttlebutt approach to possibly reject your original hypothesis. But it should be the last 20 percent or 10 percent. That’s the scuttlebutt aspect of it.īut I believe that as you’re acquiring knowledge about industries in general, companies specifically, that there really isn’t anything like first doing some reading about them, and then getting out and talking to competitors, and customers, and suppliers, and ex-employees, and current employees, and whatever it may be.Īnd you will learn a lot. I mean, you’re interested to start with now you have to find out if you can keep him in school, if he’s coordinated, and all that sort of thing. You should be like a basketball coach who runs into a seven-footer on the street. I mean, you don’t want to be chasing down every idea that way, so you should have a strong presumption. Now, the general premise of why you’re interested in something should be 80 percent of it or thereabouts. ![]() And I don’t think you can do too much of it. So by now, I’m probably fairly familiar with most of the businesses that might qualify for investment at Berkshire.īut when I started out, and for a long time I used to do a lot of what Phil Fisher described - I followed his scuttlebutt method. And the one advantage of allocating capital is that an awful lot of what you do is cumulative in nature, so that you do get continuing benefits out of things that you’d done earlier. Well, the answer to that question is that now I spend practically none because I’ve done it in the past. ” When you’ve identified a business that you consider to warrant further investigation - more intense investigation - how much time do you spend commonly, both in terms of total hours and in terms of the span in weeks or months that you perform that investigation over?” During the 1998 Berkshire Hathaway meeting, Warren Buffett was asked about his use of Fisher’s scuttlebutt method: ![]()
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