[HN Gopher] See's Candies is Warren Buffett's 'dream' investment
___________________________________________________________________
See's Candies is Warren Buffett's 'dream' investment
Author : Anon84
Score : 105 points
Date : 2022-05-15 15:39 UTC (7 hours ago)
(HTM) web link (thehustle.co)
(TXT) w3m dump (thehustle.co)
| 01100011 wrote:
| I'm pretty sure the peanut brittle has crack cocaine in it. Avoid
| at all costs unless you want to spiral into a never ending
| addiction.
|
| Sees is able to transform cheap ingredients into a premium
| product. It has a strong brand and pricing power. These are good
| things to have in a company.
|
| Still though, it's a luxury good and not something I'd want to
| own as we head into a recession. Own things people need, not
| things they want.
| otherme123 wrote:
| I find that afordable luxuries are good in a recession. People
| still want to feel that they are buying something more than
| pure need, and a box of good chocolate or a Coke instead of tap
| water are more afordable that a tailored suit or an expensive
| car.
| daniel-cussen wrote:
| I replaced buying Coke with tap water, but with a special
| additive. Incredibly cheap. But it just tastes better than
| Coke, like why would I buy Coke now that I have water with
| that additive, Coke just tastes heavy and fattening now.
| _zoltan_ wrote:
| why not name the additive? I for one would like to know
| parenthesis wrote:
| If you set up a bottling plant, he'll sell you the
| additive but won't tell you what's in it.
| daniel-cussen wrote:
| Grape sugar
| teruakohatu wrote:
| Can you share a link to the product. Googling it only
| came up with commercial announcements. Is it granular or
| liquid/syrup?
| daniel-cussen wrote:
| Right. Yes.
|
| Dextrorotative glucose.
|
| Grape sugar, blood sugar, corn sugar, glucose, dextrose.
| Dex.
|
| Dextrose monohydrate, powder. It tried the syrup from the
| commodity seller I bought from, but it was too thick, too
| glassy and I couldn't mix it. Food production facilities
| get it in that form, however.
|
| But the powder is great, you can get a little 1 pound bag
| from a brewer to try it, it looks...well it looks like
| powdered sugar, but fluffier and uses more volume. I buy
| them bulk, 25 kilo sacks at commodity prices.
|
| Mix like three tablespoons per liter, it mixes easy and
| produces a foggy, slightly acidic water that eliminates
| hunger instantly. Promise.
|
| .
|
| Now be careful, you have to use a homemade mouthwash
| immediately afterward to clean your teeth, because this
| is very yum yum yummy for mouth bacteria. Like a petri
| dish.
|
| Mouthwash ingredients: xylitol, baking soda, to taste.
| Like a tablespoon each per liter of tap water. I got it
| from a dentist online, Dr. Frei or Frey, can't find it
| anymore on my youtube. But it'll go everywhere the
| dextrose can go, and your teeth feel so so clean. You can
| add a drop of bleach to whiten your teeth...and
| definitely get some mint oil, like for massages, that
| shit, 100% mint oil. I use peppermint oil, Nature's Truth
| Essential Oil for aromatherapy. It's taken from the
| plant, so eh. 5 drops per liter.
|
| .
|
| Note that the mouthwash contains no dextrose, you first
| drink your dextrose, then rinse with the mouthwash and
| spit the mouthwash out, got that? And use your judgment.
| Your body will tell you what you're doing right or wrong.
| It knows what this shit is. You should get instant
| tangible noticeable effects from both, like immediate
| dissipation of hunger from dexwater as you drink it, and
| clean clean mouth with hardened stronger teeth (in 6
| seconds) from the mouthwash. Great breath too from the
| mint.
|
| .
|
| Both liquids are highly perishable, so you'll never find
| them retail. Must be homemade. Like they both last 48
| hours. Both rot quickly when in water.
|
| .
|
| Hey I could totally use affiliate links. Well I won't,
| except I will say if you're in Santiago de Chile get your
| dextrose monohydrate at Venser SA in La Cisterna.
|
| I might post it as a main thread, and link to that post
| here.
| marvin wrote:
| He might mean glucose, which is known as grape sugar in
| some languages.
| ac29 wrote:
| Grape sugar is usually just a fancy name for glucose.
| aaaaaaaaaaab wrote:
| Maybe real coke?
| wayne wrote:
| I watch the Berkshire annual meetings, and after watching
| Warren and Charlie eating peanut brittle for 6 hours, I
| couldn't help but buy/try some, and then you're hooked.
| daniel-cussen wrote:
| The strong brand, yeah. That's what Warren Buffet looks for
| most. Really means you're getting a good deal, so he looks for
| things people psychologically have ingrained are good deals,
| and then makes them higher-priced deals. Maybe still good deals
| but I don't know. Because a win-win deal can be made into a
| win-lose deal simply by negotiating.
| fny wrote:
| This is actually something you'll notice in grocery stores
| now. The higher price has moved far higher (2x) while the
| discount price has moved 20%. They're prepping everyone for
| higher prices if needed.
| shrubble wrote:
| I know I am "supposed" to like Warren Buffett, but frankly I
| don't; and this does show why I don't.
|
| Buffett buys a discretionary, almost a luxury item, store, and
| jacks up the prices well above the rate of inflation. The owner
| of LVMH does the same.
|
| This is not the same as a company that is advancing technology or
| building the same item, but for less money.
|
| I value the guy who runs the sriracha sauce company higher than
| Buffett: https://theweek.com/articles/753620/sriracha-hot-sauce-
| guy-a...
| jdlshore wrote:
| A key quote from the article supports what you're saying:
|
| "Warren and I raised the prices of See's Candies a little
| faster than others might have. There are actually people out
| there who don't price everything as high as the market will
| easily stand. And once you figure that out, it's like finding
| money in the street."
|
| Whether that's a reason to admire Buffet, or dislike him, I'll
| leave to the reader. The impression I have of Buffet is that's
| not a romantic; he's out to make money in a sustainable, long-
| term way, and is unapologetic about it.
| [deleted]
| daniel-cussen wrote:
| mikebenfield wrote:
| > he says never invest in tech, never ever.
|
| He's repeatedly explained that he doesn't invest in tech
| (well, until recently) because he doesn't understand it will
| enough, but has he ever told others not to invest in tech?
| nightski wrote:
| They are quite smug and judgmental in their annual meetings
| towards anything they don't understand.
| marvin wrote:
| That's good; means the good things they don't understand
| will be priced lower for those who do.
| boeingUH60 wrote:
| > but he says never invest in tech, never ever.
|
| He has changed his stance recently, and now has billions in
| tech holdings, including a recent HP bet [1]. IIRC, Berkshire
| also has big stakes in Apple, IBM, and Nubank.
|
| 1 - https://thetechee.com/warren-buffetts-berkshire-hathaway-
| rev...
| mbesto wrote:
| > I value the guy who runs the sriracha sauce company higher
| than Buffett:
|
| Value him in what sense? The sriracha guy made a terrible
| commercial mistake. The capitalist in me doesn't value a person
| who does that and I would hesitate investing in a venture he
| did over, say, Warren Buffet (hypothetically speaking of
| course).
|
| People "like" Warren Buffett because he's the ultimate
| capitalist. Also...
|
| If you value the sriracha guy over Buffett in a "altruistic
| this is better for the consumer" type of way, then sure you
| could make that case (as the article does), but also remember
| that Buffett is giving away all (most) of his profits to
| charity. The utilitarian could argue that Buffett's value is
| far greater. He's gobbled up all of the profits from various
| industries (for example luxury goods which provide little
| benefit to "the little guy") and is reapportioning those
| profits to charities that may actually save lives (not just
| dress up your rice). I don't know, I'm not arguing _for_
| Buffett personally, but there 's more than whats on the
| surface.
| shrubble wrote:
| What was the 'terrible commercial mistake' that the sriracha
| guy made?
|
| If the sriracha guy is letting people keep their own money,
| that is decidedly utilitarian also...
| boeingUH60 wrote:
| > "May your new truffles melt in transit, may they sour in
| people's mouths, may your costs go up and your profits go
| down..."
|
| That's a pretty harsh curse for a business :(
| photochemsyn wrote:
| Warren Buffett seems to specialize in the kind of monopolistic
| sectors that many other countries have chosen to nationalize, as
| there really isn't any 'competitive free-market model' that
| applies - namely, the power grid and the the railroads.
| s1artibartfast wrote:
| Which country has a nationalized candy industry?
| Drunk_Engineer wrote:
| Belarus.
|
| https://en.wikipedia.org/wiki/Kommunarka_(confectionery_plan.
| ..
| john-tells-all wrote:
| They're down the street from me (Los Angeles) -- See's candy is
| literally the best I've ever had. Lots of variety, reasonable
| prices. Recommended for yourself or a gift for a friend.
|
| Yum <3
| 3grlkjlkj35 wrote:
| diego_moita wrote:
| > Buffett cautioned Huggins to never sacrifice quality for
| profit.
|
| Funny how that's the complete opposite of another celebrated
| investor: Jorge Paulo Leman from Brazil's 3G Capital Partners
| (Heinz, Popeye's, Anheuser-Busch, Tim Horton's, Bugger King,
| etc).
|
| Their game is to buy brands with very strong customer loyalty and
| slash costs (and quality). In the long run they'll destroy the
| brand but until then will make enough profits to more than
| compensate for the investment.
| slavboj wrote:
| The difference is that Buffett uses subsidiaries to reduce
| Berkshire's long term cost of capital for other projects,
| rather than trying to squeeze returns from them directly.
| lotsofpulp wrote:
| And yet Buffett decided to become business partners with them:
|
| https://finance.yahoo.com/video/warren-buffett-kraft-heinz-p...
| parenthesis wrote:
| And has probably regretted it.
| skippyboxedhero wrote:
| That isn't their strategy.
|
| The largest part of their strategy has been cutting central
| costs (which are, not coincidentally, obscenely large at
| consumer goods companies). That has been their strategy since
| the early days.
|
| The cost-cutting that you are seeing across the industry
| started because 3G exposed the fact that a lot of companies
| were running with incredible amounts of fat. But during that
| time, you have also seen massive increases in competition
| across the sector due to changes in consumer demand that has
| led to brand-destroying behaviour.
| catgary wrote:
| What that company did to Tim Horton's was basically an act of
| war against Canada.
| imposterr wrote:
| To be fair, even before that acquisition, the quality had
| been going down. The biggest jump imo was when they went from
| making the donuts in-house to having them delivered and just
| heated at the location.
| markus_zhang wrote:
| I haven't been to a TH for ages. Their coffee tastes badly
| and the food is ... merely food. Back in 2005 when I first
| arrived in Canada TH was the first store I visited.
| hackernewds wrote:
| > Bugger King
| noduerme wrote:
| When were Popeye's or BK "quality" brands? I don't remember
| them getting any worse since RBI bought them.
| bombcar wrote:
| Before the fast food brands revitalized Burger King (and
| somewhat Carl's Jr.) were famously a bit of a cut above in
| quality (and price) but now everyone works on an on-demand
| model and the difference is harder to notice.
| reaperducer wrote:
| _Before the fast food brands revitalized Burger King (and
| somewhat Carl's Jr.) were famously a bit of a cut above in
| quality_
|
| Yep. And it put one of my relatives on the unemployment
| line.
|
| <anecdote>
|
| He was responsible for importing cheap meat from Australia
| and New Zealand for Burger King and a bunch of prisons.
|
| In the early 90's there was a brief wave of "made in USA"
| pride that swept America, and Burger King changed suppliers
| and advertised "Made with all American beef!"
|
| That cut my relative out of the picture, and his prison
| clients weren't enough to make up for the loss, so he lost
| his job.
|
| </anecdote>
| moralestapia wrote:
| I remember Popeye's to be quite good, a long while ago
| though.
| frakkingcylons wrote:
| I feel like BK used to be a lot better back in the 2000s but
| that could just be fond memories.
| DrewRWx wrote:
| My guess is it is because that is the era when BK really
| leaned into the McDonalds sized chip on their shoulder.
|
| So, kinda like the petty thrills that the "console wars"
| had.
| notorandit wrote:
| Because he likes those candies!
| kaycebasques wrote:
| Here's a little history family history related to See's. My great
| grandpa was a chocolatier. Had his own store in San Francisco in
| the 30s. WWII hits and chocolate gets rationed. He has to close
| down his store. See's stays open because they have contracts with
| the military to provide chocolate for soldiers. See's hires my
| great grandpa as chocolatier.
| interestica wrote:
| Military-grade chocolate.
| DrewRWx wrote:
| The military-industrial complex strikes again!
| ww520 wrote:
| Sees sells gift certificates on one pound of candy that can be
| redeemed whenever, like 10 years from now. I bet they wrap those
| certificates in NFT their value would quadruple.
| johnday wrote:
| Per the end of the attached article, you're wrong - maybe their
| _price_ would quadruple, but their value would not change at
| all.
| hamiltonians wrote:
| i think it also cannot be ignored that his companies and
| investments are a contributing factor for diabetes and obesity in
| america and worldwide. he will be dead soon but future
| generations will have to deal with it.
| alexb_ wrote:
| What are you even trying to say with this comment roflmao
| jodrellblank wrote:
| One of Buffett's main investments is (was) CocaCola, and
| things like
| https://www.nytimes.com/2018/07/14/world/americas/mexico-
| coc...
| [deleted]
| throwaway892238 wrote:
| From http://csinvesting.org/wp-
| content/uploads/2015/01/Sees_Candi...
|
| _"Warren and I raised the prices of See's Candies a little
| faster than others might have. There are actually people out
| there who don't price everything as high as the market will
| easily stand. And once you figure that out, it's like finding
| money in the street."_
|
| _[...] During the same period, the Retail Clerk's Union
| attempted to organize the sales force in the stores. See's since
| has triumphed in four attempts to organize by the Retail Clerk's
| Union, mainly by paying higher than union-scale wages._
|
| _[...] At one time, See's came under attack by a major candy
| producer from the Midwest. [...] They duplicated our identity and
| tried to grab out market. Of course, I informed Charlie and
| Warren about that fact." Munger said, "If they are infringing on
| our trade mark in any way, we can go after them." Stover's
| eventually backed off._
|
| _Part of See's competitive advantage is that it is a leader in
| its market. "In some businesses, the very nature of things is a
| sort of cascade toward the overwhelming dominance of one firm,"
| said Munger._
|
| _[...] Thus our first lesson: businesses logically are worth far
| more than net tangible assets when they can be expected to
| produce earnings on such assets considerably in excess of market
| rates of return._
|
| _[...] "Jack was a life-time friend of mine and an excellent,
| but somewhat eccentric, businessman... When we were due to close
| the purchase at Charlie's office, Jack was late. Finally
| arriving, he explained that he had been driving around looking
| for a parking meter with unexpired time." Far from being annoyed
| at the delay, says Buffett, he was delighted: "That was a magic
| moment for me. I knew then that Jack was going to be my kind of
| manager."_
| GoodJokes wrote:
| finiteseries wrote:
| For an entire book's worth of this article, I highly recommend
| Lowenstein's biography of Buffet.
|
| Fantastic, detailed read and I had zero interest in the man
| beforehand.
|
| https://www.goodreads.com/book/show/1155
| Animats wrote:
| It's the slow and steady increase in prices that made it so
| profitable. About 5x over inflation during Buffett ownership.
|
| This has happened to far too many items over the last few
| decades. Most of the things drugstores sell are cheap to make,
| but have steadily increased in price in the US over the last few
| decades. Vitamins used to be priced according to manufacturing
| cost. Slowly, the low-cost vitamins have been up-priced to match
| the expensive ones. Vitamin C is about $10/Kg in bulk, but about
| $100/Kg at a US drugstore.
| stefan_ wrote:
| That's a very weird example - the majority of people buying
| Vitamin C at a US drugstore could just as well light their
| money on fire to no discernible difference in their health.
| giantg2 wrote:
| Maybe they're buying it to adjust the acid balance in their
| homemade wines (like me)?
| stefan_ wrote:
| Then I'm sure you can get a kilo of the stuff from a
| supplier at a price much closer to bulk. That is not what
| they are selling in a US drugstore, however.
| giantg2 wrote:
| They sell NOW supplements in half pound bottles for $6-8.
| Works for me and lasts a very long time. Much cheaper
| than the acid blends at brew shops too. I'd have no use
| for a kilo.
| hristov wrote:
| This is the predictable result of increasing drug store
| consolidation.
| Barrin92 wrote:
| is there branding to this? Because if Vitamin C is 10 bucks in
| bulk and 100 bucks in drug stores I'm about to open a 50 bucks
| vitamin C store in the US. Competition generally eliminates
| these kinds of margins. Quick check here on the German Amazon
| you can get Vitamin C ranging from 13EUR/kilogram to
| 117EUR/kilogram, they show that ratio explicitly.
|
| If people want to pay 10x for the fancy bottle and name they
| can but I don't think they lack the alternatives.
| tsimionescu wrote:
| Where will you sell this? Will the people normally buying
| supplements buy from you?
| Animats wrote:
| _Competition generally eliminates these kinds of margins._
|
| That's last-century thinking, from when manufacturing cost
| dominated. Today, it's all about building a monopoly and
| crushing any new entrants. Comcast. Apple. Google. Facebook.
| CVS. The US is down to four big banks.
| ethbr0 wrote:
| Costs of goods sold always dominates.
|
| Comcast, Apple, Google, and Facebook are all who they are
| because they manufacture the thing they're selling for
| cheaper than anyone else can.
|
| Whether that "thing" is last mile connectivity, iPhones, or
| segmented advertising eyeballs.
| Barrin92 wrote:
| That's not last century thinking. You can't create any
| monopoly for generic drugs, by definition. You're not even
| forced to buy an an expensive Apple or Google phone. You
| can buy a 200-300 dollar phone with more than decent specs.
| They reason why people are running around with 1k phones is
| because it's a status symbol.
|
| It's exactly this century where you can buy anything at
| manufacturing cost from India or China if you want to,
| there's an entire political class upset about it.
|
| I mean I'll give you Comcast, ISPs in the US in particular
| seem bad, but otherwise? Digital and electronic goods in
| particular have been driven down to the marginal cost of
| production, that's why 90% of the former are free.
| user3939382 wrote:
| The missing key concept here is "regulatory capture". In
| many industries, companies get enough money and power
| that they can afford to rewrite the laws to lock
| themselves in and put up a big barrier to entry to keep
| competition out.
| tsimionescu wrote:
| There is no regulation in supplement selling, except for
| food safety. You can sell sugar branded as Vitamin C, and
| if your customers aren't going to sue you for false
| advertising or something, you won't have any problems.
|
| The prelegeri really is retail capture.
| CSSer wrote:
| > prelegeri
|
| Sorry, I'm having trouble tracking down this term. Could
| you tell me what it means or what it means in this
| context?
| tsimionescu wrote:
| Oops, that's bilingual predictive auto-correct failing,
| and me not re-reading my comment...
|
| I wanted to say "the _problem_ is retail capture ", but
| somehow it filled in a Romanian word instead... Phone
| keyboards...
|
| Just for completeness, "prelegeri" would be best
| translated as "lectures" - it made no sense at all in
| context, it only happened to match a few letters of what
| I fat-fingered.
| jodrellblank wrote:
| Speculation: Google Translate says it's "lesson" in
| Romanian; tsimionescu's name might make that make sense.
|
| Possibly connected to
| https://en.wiktionary.org/wiki/praelego#Latin and the
| form praelegere to 'read before' in Latin, either the
| same kind of lecture/lesson sense, or about the parent
| comment "reading 'regulatory capture' before should
| really be 'retail capture'"?
| tsimionescu wrote:
| You're right about Romanian, and the best translation is
| "lecture", but it was just a bilingual predictive
| keyboard-assisted mistype - the best kind of mistype!
| bjourne wrote:
| Do you have any idea on how I can avoid the excessive
| interest rate the bank charges on my mortgage? :) Yes I
| checked, other banks loans are just as expensive. So it
| seems I'm not able to buy loans at "manufacturing cost"
| and neither am I able to buy gas or electricity for
| minimal cost.
| aj7 wrote:
| Never walk into a BANK and apply for a loan. Use one, or
| better, a number of mortgage brokers. Make a spreadsheet.
| Add in all garbage fees. Estimate the life of the loan.
| Now calculate real APR. Points and garbage fees dominate
| if you're going to sell or refinance in a few years.
| briandear wrote:
| You could get a loan at prime rate if you were a bank.
| You likely aren't a bank, so a retail loan is what you
| get. Prime rate is the interest to the bank. Retail rates
| are higher because there are costs associated with your
| loan. Those costs also include the degree of risk to the
| bank.
| BbzzbB wrote:
| >You can buy a 200-300 dollar phone with more than decent
| specs
|
| Two weeks ago I got a "9.5" (looks brand new, battery
| too) used Pixel 3a for 100$ on eBay. It's a perfectly
| fine phone with picture/video quality undersold by it's
| camera pixel count.
| Animats wrote:
| _You can 't create any monopoly for generic drugs, by
| definition._
|
| Sure you can. If you're the dominant player, you can pay
| or buy out new entrants. Happens all the time in generic
| drugs.[1]
|
| [1] https://www.nytimes.com/2015/09/21/business/a-huge-
| overnight...
| HomeGear wrote:
| There has to be more to it. If not, a simple refusal to
| sell would allow you to move the market. If the sellout
| bundle is profitable enough, why doesn't everyone start a
| generic drug company to be sold and retire rich?
| ldoughty wrote:
| Then the competition moves money from profit markets to
| undercut you... making it impossible to compete... your
| competition subsedize the costs and effectively sell for
| 20% below cost until you agree to sell or close shop
| taffer wrote:
| How can they sell vitamin c at 10x the bulk price and at
| the same time undercut you?
| fifticon wrote:
| It happens with a lot of stuff. Chocolate candy bars in
| gas station kiosks are always the same 5 brands. Anybody
| _could_ make chocolate bars, but the big players make
| deals to control retail, so you don't get a choice of
| other candy bars, in the situation you'd typically buy
| one. If I control the conditions under which you buy
| something, I can control what you are going to buy.
| briandear wrote:
| Because small chocolate manufacturers don't have the
| scale to supply massive distribution companies. An little
| retail gas stations don't have any incentive to go make
| deals with boutique manufacturers. That would be madness
| for a gas station owner to go to individual manufacturers
| for specific items. And the manufacturers would hate it.
| Dealing with hundreds of thousands of small orders would
| be a logistical pain. That's the reason their is a
| distributor layer for those sorts of products. If
| customers at gas stations started demanding Valrhona
| chocolate, they'd ask their distributors to start getting
| it. I'd buy it, but most people at gas stations aren't
| going to care about a $10 chocolate bar.
| hackernewds wrote:
| The monopoly is in the illusion of access to choice on
| shelves. The pharmacy markets is dominated in the US by 2
| players - Walgreens and CVS. Heck they even have their
| own generic meds competing at the same prices
| taffer wrote:
| Sounds like the perfect start-up plan: just open a 50
| bucks vitamin C store, and the dominant player will buy
| you out for $$$. Rinse and repeat for infinite money.
| johannes1234321 wrote:
| For that to work you first have to scale up production
| and distribution significantly enough to be on their
| radar. That requires some investment and then the
| question is whether is an investment, with higher
| probability of returns.
| ldoughty wrote:
| There's usually a x-year non-compete agreement when this
| happens... I know a guy that does exactly what you
| describe, starting a new garbage pickup service every 3
| years, when the agreement elapses. He then works for ~3-4
| years to build it back up. Sold twice already, and on his
| third.
| technothrasher wrote:
| Laundromat -> liquor store -> hotel -> retire rich is a
| common path here. Rinse and repeat a couple times at each
| point, and because you sell each time to the guy trying
| to do the same thing behind you instead of to a big
| competitor, there's never non-compete agreements. Bonus
| in that the first two are recession proof and cash heavy
| businesses (if you wish to avail yourself of the
| possibilities that suggests).
| lotsofpulp wrote:
| Anecdotally, work from home put a crimp in many
| laundromat businesses. And liquor stores only work in
| states that do not let the big stores sell liquor. These
| days, any half decent hotel brand will require a couple
| million cash (for the down payment), and more for a new
| build. At least in the western US.
| hackernewds wrote:
| What if there were no agreement? seems like _he_ is the
| driving successful factor in these businesses, but I 'm
| guessing he'd rather sell his company than get hired by
| them.
|
| there are example employees I've seen that have this kind
| of leverage too
| jjeaff wrote:
| Four big banks, but I don't see much competitive advantage
| to having such large banks. In fact, many people choose one
| of the thousands of smaller, regional banks because
| customer service or services in general are better.
| Scoundreller wrote:
| US has more banks than any other country by a factor of
| 10. Now, they may not all be retail banks, but still,
| there's more choice in the US than elsewhere. Then
| there's credit unions too.
|
| https://www.helgilibrary.com/charts/what-country-has-the-
| mos....
| daniel-cussen wrote:
| Yeah I just mentioned Comcast and a hospital, along with
| Wells Fargo.
|
| https://news.ycombinator.com/item?id=31384732
|
| "Don't say the money is like magnetically charged. It's not
| the money is attracted to the north. It's the people, an
| asshole whose idea of invention is coming up with excuses,
| couldn't come up with shit if he cleaned up after his dog
| for once. Wants what is rightfully for innovators (creation
| of wealth that can scale, through thought that can be
| imprinted many times) and tries to corner a market. It
| always has a name, it's not an organic thing, there is
| always a guilty party. Not ISP's, Comcast. Not local
| banking, Wells Fargo. Not healthcare, Christus. Say it,
| corner the market. They're trying to corner the market. The
| markets have been cornered."
| bluedino wrote:
| 7-11 came out with their own brand chips, donuts, etc a few
| years ago. It's every hit as expensive as the brand name
| stuff was.
| mistrial9 wrote:
| hmm you can differentiate your product via brand and placement
| to gain revenue OR participate in a commodity market, based on
| price and volume. There is no "law" to make products one way or
| the other. Price increases for commodity are a serious concern,
| but price increases for brand and placement, why not? really..
|
| Public perception of scarcity is a cause for panic, and that is
| a real concern, regardless of origin.
| Animats wrote:
| Controlled scarcity increases profits, as companies are now
| discovering. If there's some place in the distribution
| channel where the incumbent can block new entrants, prices
| can be increased enormously without facing market forces.
| lotsofpulp wrote:
| >Vitamins used to be priced according to manufacturing cost.
| Slowly, the low-cost vitamins have been up-priced to match the
| expensive ones. Vitamin C is about $10/Kg in bulk, but about
| $100/Kg at a US drugstore.
|
| How does one even know if the Vitamin C is Vitamin C? There is
| no government agency that confirms supplements and vitamins are
| what they say they are, nor are there penalties. The only thing
| I have heard of is the USP branding being a signifier of higher
| likelihood of the supplement/vitamin being what it says it is.
| Vladimof wrote:
| The US is very bad at ensuring our food supply is what it
| claims to be.... you have to trust companies, basically.
| briandear wrote:
| Sounds like a pretty clever startup idea. Consumer Reports,
| but for everything. Then a seal that manufacturers can put
| on their product that certifies the assay of ingredients.
| Does a Coke actually have 120 calories? Is a Vitamin
| actually what it says? Is the bottle actually recycled?
| Consumer Reports is often opinion based with some
| quantitative data and they don't review everything. Is you
| olive oil actually from Italian olives? Are those organic
| pears actually organic? Products that get "the seal" can
| market that fact. And if consumers care enough, they'll
| pick products that are certified to be what they say they
| are. If I am buying high end paint, the water content
| matters to me for example.
|
| The FDA should really focus entirely on consumer safety
| only. (It's not a safety issue if your olive oil is
| Moroccan rather than Spanish or whatever.) And the FDA
| doesn't have any mission to test if that 18/10 stainless
| steel sink is actually 18/10 stainless for example.
| Vladimof wrote:
| sounds really good but in the end, companies will do
| what's best for their bottom line... I think the
| Government should do it
| mcculley wrote:
| We need a UL/Consumer Reports for Internet-connected
| devices that documents and certifies their use of
| personal data and bandwidth. The regulators are not going
| to be able to keep up with the changes.
| lotsofpulp wrote:
| Selling something that is not what you say it is is false
| advertising, and falls under the purview of the FTC.
| Unfortunately, the testing, enforcement, and penalties
| are all extremely weak.
|
| Trust in the marketplace is a very valuable asset, one
| that cannot be bought. It has to be cultivated and
| maintained over many, many years, and having the
| government do that makes perfect sense as it is a
| societal benefit.
| s1artibartfast wrote:
| Or do your research with companies that have independently
| assess products
| Vladimof wrote:
| not very many people can afford to do their own
| research... lab tests for everything you buy?
| giantg2 wrote:
| They mean there are third party organizations that
| perform testing. Consumer Reports and such. Or most
| supplement companies pay for independent testing (some
| skepticism is warranted since they're the ones paying).
| whiddershins wrote:
| This is literally how all construction materials are
| vetted and it works great.
|
| Underwriters Laboratories.
|
| If it were feasible to sue retailers for damages due to
| fraudulent vitamins, approximately 0% of supplements sold
| would be fake.
|
| The problem is there isn't adequate scientific evidence
| to back the efficacy of any of these supplement which is
| why they aren't regulated in the first place.
| AuthorizedCust wrote:
| > _The problem is there isn't adequate scientific
| evidence to back the efficacy of any of these supplement
| which is why they aren't regulated in the first place._
|
| While I would agree that good evidence is generally
| lacking on supplements, that's different than "is the
| product as advertised". Just because vitamin C isn't a
| miracle drug wouldn't justify selling sugar pills as
| vitamin C.
| pcbro141 wrote:
| https://labdoor.com/
| hackernewds wrote:
| if we can't trust a company's label, how can we test
| another company's testing? the incentives to deceive
| still exist
| jokethrowaway wrote:
| Not you personally, but there can be third parties
| companies reviewing products
| Vladimof wrote:
| while that may be true (and better then nothing), you
| still have to rely on companies like I said originally
| s1artibartfast wrote:
| You always have to rely on somebody if you don't do it
| yourself.
| Vladimof wrote:
| well, of course, but the Gov. would hopefully have goals
| better aligned with the population....
| s1artibartfast wrote:
| Maybe, I personally would trust the 3rd party more, but
| understand that opinions differ.
|
| I think that the 3rd parties have both more at stake to
| get it right and are less influenced than the gov.
| pgrote wrote:
| >How does one even know if the Vitamin C is Vitamin C?
|
| Good question. For the last few years I've subscribed to
| Consumer Lab. They have a rigorous testing program for
| vitamins and supplements.
|
| https://www.consumerlab.com/about/
| hackernewds wrote:
| Is there one similarly for sunscreen and lotions for
| toxicity?
| mbesto wrote:
| Yes! https://www.ewg.org/sunscreen/
| millisecond wrote:
| I think this is part of why they're so expensive. If you can
| only go off reputation, you pay for it.
| appleflaxen wrote:
| Look for USP certification.
|
| My understanding is that it's voluntary, but the equivalent
| of the QC that prescription medications undergo.
| ackbar03 wrote:
| So basically they changed it to a premium product?
| CydeWeys wrote:
| It's always been a premium product. Buffet increased the
| prices to the cost the market would bear for said product.
| You could argue they were giving it away too cheaply before
| that.
| shevlinn wrote:
| Next week in Berkshire Hathaway investments: Dexcom
| chrisma0 wrote:
| I guess being Warren Buffett's "dream" investment isn't a bad
| marketing pitch either :)
| whatshisface wrote:
| In his letter to the CEO he expressed skepticism that the myth
| of a geographically unique business had anything to do with the
| real value of their products, so in a sense it's the opposite
| of a marketing pitch.
| nikanj wrote:
| Unfortunately the small candy company has a very reasonable
| business model, and generates stable revenues.
|
| Generating stable revenue is the worst thing that can happen to a
| company, because now your company can (and will!) be priced
| according to multipliers on fundamentals.
|
| A pie-in-the-sky business model with 0 launched products will
| fetch a much higher price on the markets
| lupire wrote:
| it's not the worst at all. it provides good recurring money or
| a nice exit. Sure, getting a -10 P/E on a money losing business
| is great, if you can exit, but that is extremely luck driven
| and friends driven, which is harder to break into than running
| a good business.
| renewiltord wrote:
| What's unfortunate. It looks like someone who valued it
| appropriately has it and the business is in great shape. This
| is the whole thing: you can just beat everyone by picking
| better and running it appropriately. If you can't find a path
| to the first, I really can't believe you can find a path to the
| second.
| cjbgkagh wrote:
| Silicon Valley HBO did a skit on the importance of 'no revenue'
| https://youtu.be/BzAdXyPYKQo
| mistrial9 wrote:
| a concept of "cancer" comes to mind when you describe that,
| somehow..
| baersandbowlszs wrote:
| Naturally. You may have also noticed that our economy has
| been growing explosively while providing less and less to
| most members of society.
|
| We can keep extending the analogy by saying that the Fed has
| belatedly started some long-overdue chemotherapy by raising
| interest rates, but the late stage and metastasis make for a
| grim prognosis.
| slavboj wrote:
| Buffett's MO for subsidiaries is businesses that generate low
| cost free cash flow that can be leveraged to fund more
| speculative paper investments. It's very similar to the
| conglomerate model - arranging for an internal cost of capital
| lower than you can get on the open market, to fund capital
| intensive longer term projects.
|
| Interestingly Berkshire has never tried to develop any
| "synergies" whatsoever between its businesses, other than perhaps
| Dilly Bars at corporate events.
| zie wrote:
| Basically all true, except every other conglomerate generally
| wanders into debt, then acts like it's candy, gets hooked and
| then runs into untold troubles for a while, when the debt and
| bad deals eventually catch up with them.
|
| BRK noticeably avoids debt, prefers all cash deals and keeps a
| very strong pile of cash laying around just in case.
| slavboj wrote:
| Berkshire's ability to commit to long-term planning (at least
| currently) instead of levering up to boost short term returns
| to equity gives them an advantage over the traditional
| conglomerate model.
| spchampion2 wrote:
| My late grandmother loved Sees candies, and I frequently gave her
| a box for Christmas every year. Personally I always thought they
| were expensive and not as good as some of the artisanal chocolate
| you can find these days; like a product for older generations
| with older tastes.
|
| And then I discovered their lollipops and little pops - both
| chocolate and butterscotch. They're uniquely good as hard
| candies, and I've never had anything quite like them anywhere
| else. Now I'm also a Sees candy customer.
| annoyingnoob wrote:
| > like a product for older generations with older tastes
|
| Their product is very consistent, as well as the branding.
| There are very few brands that have been so consistent for so
| long, See's has always kept things relatively simple, clean,
| and consistent. It is easy to believe their commitment to
| quality.
|
| The days of going to the butcher shop, the bread shop, having
| the dairy deliver, are basically over. See's somehow survived
| supermarkets and mass production. Seems that the See's family
| had the perfect candy shop model from the start.
| buzzy_hacker wrote:
| Their butterscotch lollipops are _so_ good.
| ethbr0 wrote:
| > _uniquely good_
|
| It feels like so many companies nowadays have forgotten about
| this and long term branding.
|
| Everybody claims to want to be good, but (to crib from the Sees
| example in the article) isn't _dedicated_ to being good at the
| expense of short term revenue and profits.
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