On a Trip to the London Zoo (3/18/04)
 

Of the Warren Buffet-Jeff Raikes correspondence is a great exercise in status incongruence theory, and social deference, reminding one of the monkeys I just saw in the London Zoo. Raikes compares the business of See's Candies and Coca-Cola favorably to Microsoft. "In some respects I see the business characteristics of Coca-Cola or See's Candies as being very similar to Microsoft. (our flexibility is similar to) your "pricing decisions ..On See's candies". Our freshness is similar to Disney continuing to produce new content or Nebraska furniture mart continuing... " .. our moat , " i.e. If I owned the most successful daily newspaper in Buffalo, I would want to leave it to my competitor to own the Sunday edition". Then the humility, like the monkeys showing their posterior to the more dominant males. "since Microsoft is the business I understand ( i.e. I have a narrow circle of competence, and I subscribe to your view on investments,  "the transparent indirect sales pitch" well over 90% of my net worth is tied in Microsoft, ( thanks to BillG I'm well into the nine digit range ( the deference to the brother of the dominant :". Yes, and then the flattery,  " It was great to gain an understanding of Graham's approach, and more importantly your significant advancement of the approach. ... I've done a very poor job of adequately thanking you for all the great things you've done for me,  golf at Augusta, Seminole, the Buffet classic, and in particular the opportunity to listen in on great conversations and learn from you. " go huskers ". The businesses that Raikes describes are ones I have come into contact with many times in my merger days. Retail sales of a declining product are one of worst businesses in the world and never do fetch more than book. A dominant position in a sluggish economy like Buffalo will eventually be replaced by competing sources of satisfactions since consumers have a wide choice in satisfying their desires . The same applies to the syrup business of coke with competitors always knocking on the door, a declining taste for sweets and non-sports beverages, and alternate formulations guaranteed to lower one's margins. The thing I like most about buffet is his frank acknowledgment that he won't invest in anything he doesn't know about, and he can't understand how a fax or lawnmower works. he comes close to this in his answer " I have so few friends that use e mail that I only look for it once a week or so ( and usually find nothing ), . And yet, the whole correspondence is so shallow, so obviously pandering and off base, one wonders when the grand leveler, the mistress of revenge for excessive sycophancy will strike at them both. Contrast that with my people who, while I was away in Europe, bombarded me with cogent analyses of everything I was doing wrong with my positions and stewardship. vic