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See's Candies is Warren Buffett’s ‘dream’ investment

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Re: See's Candies is Warren Buffett’s ‘dream’ investment

#51

Post by tsimionescu »

user3939382 wrote: post #26
Barrin92 wrote: post #24

Earlier quoted context omitted.

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 y…

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.

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.

Re: See's Candies is Warren Buffett’s ‘dream’ investment

#52

Post by BbzzbB »

Barrin92 wrote: post #24
Animats wrote: post #22

Earlier quoted context omitted.

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.

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 y…

>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.

Re: See's Candies is Warren Buffett’s ‘dream’ investment

#53

Post by daniel-cussen »

01100011 wrote: post #23

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…

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.

Re: See's Candies is Warren Buffett’s ‘dream’ investment

#54

Post by ethbr0 »

spchampion2 wrote: post #15

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…

> 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.

Re: See's Candies is Warren Buffett’s ‘dream’ investment

#55

Post by tsimionescu »

Barrin92 wrote: post #18
Animats wrote: post #12

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-…

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 13€/kilogram to 117€/kilogram, they show that ratio explicitly. If people want to pay 10x for the fancy bottle and name they can but I do…

Where will you sell this? Will the people normally buying supplements buy from you?

Re: See's Candies is Warren Buffett’s ‘dream’ investment

#56

Post by s1artibartfast »

photochemsyn wrote: post #45

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.

Which country has a nationalized candy industry?

Re: See's Candies is Warren Buffett’s ‘dream’ investment

#57

Post by daniel-cussen »

otherme123 wrote: post #40
01100011 wrote: post #23

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…

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.

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.

Re: See's Candies is Warren Buffett’s ‘dream’ investment

#58

Post by Vladimof »

s1artibartfast wrote: post #48
Vladimof wrote: post #37

Earlier quoted context omitted.

The US is very bad at ensuring our food supply is what it claims to be.... you have to trust companies, basically.

Or do your research with companies that have independently assess products

not very many people can afford to do their own research... lab tests for everything you buy?

Re: See's Candies is Warren Buffett’s ‘dream’ investment

#59

Post by daniel-cussen »

shrubble wrote: post #41

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 t…

No post body was provided.

Re: See's Candies is Warren Buffett’s ‘dream’ investment

#60

Post by jokethrowaway »

Vladimof wrote: post #58
s1artibartfast wrote: post #48

Earlier quoted context omitted.

Or do your research with companies that have independently assess products

not very many people can afford to do their own research... lab tests for everything you buy?

Not you personally, but there can be third parties companies reviewing products
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