Why Warren Buffett Doesn't Own Nike
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- čas přidán 30. 01. 2023
- Warren Buffett often explains why he has chosen to invest in particular businesses, but rarely do we hear why he has decided not to invest in certain companies. In this video, Buffett explains why investing in Nike was not of interest to him.
"You don't have to hire out your thinking if you keep it simple". Mr Munger smells of wisdom
- „A mine is a hole in the ground owned by a liar“
- „Never ask the barber if you need a haircut“
Very insightful clip!
Consultants
1:45 - "We rather multiply by 3 than by π" 😂😂👏🏽 Smart.
2:49 - "You don't have to hire out your thinking if you keep it simple"
4:08 - Avoid being wrong.
4:30 - Sales. "Don't ask the barber if you need a haircut"
When you get so much right, you can afford to make mistakes that would bankrupt anyone else. This is a great example of that.
Ultimately it was a big mistake for them to buy Dexter Shoe, in contrast to what is implied in the video.
Just goes to show even the best make mistakes. But a few good decisions can overcome those :)
It’s up more than 3000% since he dised Nike, while the shoe business that he bought or said liked and understood is nowhere to be found.
They just didn't understand what Nike was doing so they didn't get involved. If they had they might have destroyed the company.
A neurosurgeon doesn't rebuild automatic transmissions
@@dickfitznyew4579 makes no sense what you are saying. He understands one show company but not the other? If he didn’t invest because he didn’t understood shoe business, I would agree with you. But he did pick a losing show company and not the winner.
@@moqas186 Dexter, Bates, Florsheim are in the shoe business but Nike is a lifestyle brand. Back in the 1980's Reebok was a serious Nike competitor they had the pump, the high tops etc. Nike was behind a few endorsement deals and Nike pulled ahead.
This was back when $50 for a pair of shoes was good money and even then that was way behind a pair of Bally or Florsheim dress shoes.
And the idea of men collecting shoes was unheard of back then.
Don’t forget Brooks which he’ve already owned
Crazy considering that both Nike and Reebok would’ve easily been better deals than some unknown cheap brand like Dexter.
In the last 20 years Nike has returned approximately +1,847% calculated using Yahoo charting.
Warren and Charlie like to keep things simple. Which lead to them avoiding to invest in almost all technology company investments.
"Don't ask your barber if you need a haircut."
Is Nike really all that different an opportunity from Coke or Gilette. Nike has returned almost 20X in the last 20 years.
they don't try to move on every good opportunity out there. They just try to make sure that all of their moves are good.
They seriously didn’t see Nike for what it was.
They aren’t wrong when they said that Nike isn’t easy to understand.
Nike have been very prudent in running their business- that they’ve become a cultural phenomenon was a little bit of luck and a lot of fortune.
I don’t know how they do it- but god is it interesting
@@DidierPeroni true but people say he did buy Nike . So ....
@@DidierPeroni Nike is a great company
They did say “ theyre not putting Nike
How do you differentiate between Nike/adidas/ reabok?
Thank you for sharing
Nike vs Coke
- Coke’s key competitive advantage is its distribution system, you can get your news/info/entertainment from online, but you cannot be satisfied with virtual drinks. Coke built out strong distribution system early on, retails, convenience stores, restaurants, domestic and international markets.
- Nike established the brand early on through strong marketing techs, like events, sports, celebrities endorsement, but there are many great shoe brands out there doesn’t cost 2x of its price or cater different needs. Normal folks only have 2 feet average 4-7 pair of shoes, the average lifetime spending per person should be less than the lifetime spending on drinks, plus many strong competitors, it has to constantly promote to get its advantages.
I couldn't disagree more. Nike has a wide range of products, including Converse. Nike has a cult like following, not unlike Sanders, Trump, Ben & Jerry's, Ray Ban, Rolex and Apple and many others. They are like those other brands, the relative "Iams" or "Haagen Dazs"s of their industry. Comparing beverages to shoes is irrelevant. Whether you're buying a Rolex or pair of Nikes, its a longer term commitment; that's the nature of the purchase. Lexus never expects to sell as many cars as Toyota; it's the nature of the purchase. Nike has an enviable decades long investment into their brand, and their revenue and profit. I'll pay $2.29 for a Coke Zero, in spite of the fact there's a Generic 6' away in the case. That's Coke's mote. Apple has built an impressive mote. And there are multitudes of people more than willing to pay a premium because it says Nike/ Marlboro/ Milwaukee/ Benjamin Moore,/ or thousands of other brands. If you think that Nike buyers are reticent because the retailer also sells Sketchers, I think you're assigning the power of a competitive advantage to Coke, and not to Nike, for a reason that I can't understand. Teenagers are literally killing people for those shoes. Their revenue and profit over decades doesn't support your claim.
You practically have no understanding of what he was conveying.
@@khmer31 Sure, let's go with that.
Coke vs Speed.
"Don't ask the barber wheter you need a Haircut", brilliant.
Thanks!
Can you add when these talks were given to future clips on this channel? Thanks in advance.
We almost have to use carbon dating on Charlie to see what decade the clips are from...
This is old but it endures. Warren has many uses of the word "utility."
where is full?
you have to relate to a product to have a feel to where it has potential. Maybe warren prefers flip flops when casual.
Thanks
Does this mean Warren doesn’t have any retro Js
What is the third thing Charlie says at 2:25? "An architect, a contractor and [what?]".
A hill
Evern notice how many people have $250 Nikees but don't have a emergency fund or a car?
I love to follow the two wise fellows, you can learn so much.
there is nothing to follow actually they only invest in monopolies or oligopolies
@@tenderk6151sees candy is a monopoly? lol
That stock is just stock vehicle to put the money in ,speculate and sell high , zero significant value behind, cost of production that shoe is below 5$.. like many similar organisations.just speculative assets .
Nike is built on overcharging for a cheap product based on hype created by an insane marketing budget. Buffet didnt say it was a bad stock, just one that he doesnt understand.
guess wb dont think of invest on nike bcause his experience investing at dexter shoe.and other than nike old fashion thiking he think alll shoe are commodity which earning are unsustainable.
Weird thing to say considering how he bought Dexter
He is lying
As long as you have got a couple of hundred baggers in your portfolio life is good.
There’s a reason why they are one of the wealthiest people on earth since they don’t invest in things that they don’t understand or fully understand. If you can’t teach about the company then don’t invest
Buffet only invests in companies that have moat - in other words - monopolies or oligopolies. He doesnt believe in competition
Investors quoting Mark Twain again...
I have to start selling Paige Typeset machines to these people.
In other words: it's a tough call.
“You don’t have to hire out your thinking if you keep it simple”…….consultants
They would both regret not owning some brands, Berkshire has been a failure in 2022 ..ongoing
I have a longtime man crush on Buffett, but if the soda business is dominated by Coke/Pepsi, the running business is dominated by Nike/Reebok/Adidas. Nike is the dominant player and has the same moats/ competitive advantages in the marketplace as Coke. Same as Google.
Not true, You have Fila , under armour ,Asics.
It's Nike's Tax Avoidance Tactics. They don't like that.
Turns out Dexter wasn't so good...
Nike was one of their blunders. It happens.
Well, Nike did incredibly well 🤘
Absolutely. I sense he is lying
I don't touch Nike cause I am annoyed by their woke agenda
It feels like almost every company has a woke agenda these days unfortunately.
Be woke become broke
Coke leaves a bad taste in my mouth. Nike helps me stay in shape. I can’t look past the fact that Coke is a major contributor to health issues in the - well, anywhere.
brown and dexter? who the hell likes dexter?
2:18:
Charlie: “the other day I was dealing with a problem”.
Warren looks at him and Charlie IMMEDIATELY:
“New building”.
Omg! These 2 work together like a well oiled machine!!!
Yea the mind of these two meld together in harmony. Warren and Charlie said they never had an argument and these dudes are 90+
They missed the boat on Nike. Permanence is exactly what Nike had.
They are lying . Buffet does own Nike
@@kirilmihaylov1934 proof?
I missed that boat certainly and fall in tho the sea 😂 but managed to not sink.
Nike is not cool anymore.
In fact, it never was.
True wasp point of view 😂 - don't like them but love their bold statements.
Nike is a bit like Apple. It has a great brand, high-quality products, and a loyal customer base. Free cash flow and sales revenue consistently rise. Buffett was wrong on this.
Absolutely
I don’t think Buffet ever said that Nike would fail, or that it would be a bad investment. He simply didn’t understand it, and there wasn’t enough justification at the time for the investment.
He could say the same thing against playing roulette and still be right even if you go play and multiple your money by 36x. Judging someone’s past judgements with the benefit of hindsight isn’t helpful for determining if they are right or wrong with the information they had at the time.
Apple has definitely fall from grace after the death of jobs
Nike succeeded, Reebok failed. Ultimately I think he made the right decision based on the knowledge available to him.
@@Nn-3 how ??? He didn't invest in Nike
However, in fact, Buffett does own nike
You sure
@@kirilmihaylov1934 I think Jack means Buffett owns a bike. 10 speed I think.
@@backspace4353 OK mister Police
@@kirilmihaylov1934 An officer stops a man for speeding and notices he’s not wearing his required prescription glasses.
Officer: “I have to give you a ticket for not wearing your glasses.”
Driver: “Officer, I have contacts.”
Officer: “I don’t care who you know, you’re still getting a ticket.”
@@backspace4353 i said ok chief
rare L
Same reason why he hasnt purchased tesla yet- he doesnt understand EV business
No he made a lot of money on BYD so he understands EV business but he might not understand the valuation of Tesla. Most people don’t.
He hasn’t brought Tesla not because he doesn’t understand the business he does. He has seen a lot of automakers go bust in his lifetime it’s a very competitive market. But his strength is being able to value business and returns on shares vs share prices.
So why hasn’t he brought Tesla?
Share price is too high which means the returns will not be very good. The company is overvalued and doesn’t sell enough cars to justify the valuation. Which at its peak would mean Tesla being the only car brand being brought and Tesla selling more car then are being sold globally today then the current combined market sales it’s not going to happen.
The correct valuation if say Tesla matched Toyota in car sales which would be impressive but would be a 90% reduction of its peak price and it’s got a long way to drop to be correctly valued.
Then there’s the whole problem of poor charging infrastructure globally and lack of standardisation at charging points to overcome, availability of raw materials in quantity to make the numbers of batteries required which will have serious issues down the road for Tesla, because Tesla can expand giga factories rapidly over a couple of years but ramping up copper mining and production takes decades which would very likely be the tipping point for Tesla.
@@sid35gb A fair analysis David. China can produce enough up-market EVs for much less than Tesla and sell them locally.
And you do of course... thats why investors all over the World call you: the Oracle of Palookaville
@@fabiobonetta5454 My investment record is creditable, and I was repeating other credible commentary. If Buffett had said the same, would you mock him?
How much AMD stock did you buy last week before the Q4 report?
Goodbye.
Beware!!! Buffett is full of BS. Few year after this video Buffett bought Nike and since then till 2010 he was buying and selling it.
...saying you don't understand something and haven't looked into it doesn't mean you never will...
@@AlexanderMoen he is lying
@@kirilmihaylov1934 not lying. He changed his mind. Is he not allowed to do so?
@@TalkingMoneyWithNozi Nike is great company with very good products .so it would be stupid not invest in this
@@TalkingMoneyWithNozi I don't trust him
His loss I guess but who cares when you have billions.
I Throw Herr Wintzer safety jacket i know in crazy world we livin even I screw with thinking that alternative company will make good quality product..that business have big greedy sharks there ...