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Why Warren Buffett Just Bought Duracell

71 点作者 fraXis超过 10 年前

15 条评论

nabla9超过 10 年前
Typical Buffet deal.<p>1) &gt;Interbrand estimated that the brand value of Duracell stood at $4.9 billion<p>2) &gt;Duracell maintains over 25% of the global battery market share.<p>Duracell has both brand and volume advantage over competitors in battery business. Warren Buffett coined the term economic moat to describe the advantages companies like Duracell have.<p>&gt;INVESTOPEDIA EXPLAINS &#x27;Economic Moat&#x27;<p>&gt;The wider the moat, the larger and more sustainable the competitive advantage. By having a well-known brand name, pricing power and a large portion of market demand, a company with a wide moat possesses characteristics that act as barriers against other companies wanting to enter into the industry.
shoesfullofdust超过 10 年前
In my world, AA batteries are all about door locks. There are a lot of card-reading door locks that depend on them.<p>Whenever a lock fails, step one or two or three is replace the batteries. That&#x27;s 4-6 batteries per lock.<p>As a maintenance&#x2F;security procedure, once every couple of years, every battery in every lock in the entire building is replaced. Doesn&#x27;t matter if they are dead, weak or brand new. That&#x27;s hundreds&#x2F;thousands of batteries.<p>That&#x27;s a lot of batteries. And Duracell has multiple levels of &quot;pro&quot;&#x2F;&quot;industrial grade&quot; batteries. We buy them by the case.<p>I&#x27;m sure the markup on consumer batteries are huge, but I&#x27;d also think the commercial use of double-As must dwarf the consumer market. Smart buy by Warren is my guess.<p>What&#x27;s needed in this space is a door lock that winds itself much like a &quot;perpetual&quot; watch. Something that takes the mechanical energy used to turn the door handle and turns it into stored energy that can be used to read the card and unbolt the door.<p>And there you go. Make this thing :)
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programminggeek超过 10 年前
Duracell is a smart company and has been for a long time. Batteries are a largely disposable thing and so the customer LTV is pretty awesome. Rechargable batteries haven&#x27;t really hurt the business signficantly and the need for electronics keeps going up.<p>Even more, the R&amp;D side of a battery company could be incredibly lucrative with all the electric vehicles, portable electronic devices, and so on.<p>Buying a battery company in this day and age is a smart investment in tech, even for a non tech investor like Buffet. After all, every electronic device needs power right?
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jsonau超过 10 年前
A bit off topic. Looks like Duracell has a cloud storage service, which is really strange.. <a href="https://www.duracellcloud.com/" rel="nofollow">https:&#x2F;&#x2F;www.duracellcloud.com&#x2F;</a>
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jstsch超过 10 年前
Wow, I thought most consumers these days know that generic alkaline batteries are just as good as Duracell alkaline batteries. Also, many gizmos come with cheap lipo built in + an USB port these days, that seems to be the trend. I&#x27;d think this is a business on the decline...
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wtbob超过 10 年前
For some reason, articles on time.com don&#x27;t scroll…
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TheAlchemist超过 10 年前
It´s funny to note that the longest discussion in this thread is about the time.com page not scrolling rather than about the deal itself !<p>As for the deal it´s classic Buffett - almost a sure win, little downside risk, perfect timing. If you didn&#x27;t read his biography yet (The snowball: Warren Buffett and the business of life) I highly recommend ! One of the wisest man alive.
cheriot超过 10 年前
It looks like there&#x27;s a lot of performance difference between battery brands, but Duracell isn&#x27;t a high performer.<p><a href="http://www.batteryshowdown.com/" rel="nofollow">http:&#x2F;&#x2F;www.batteryshowdown.com&#x2F;</a><p>&gt; Buy commodities, sell brands<p>&gt; Consistent cash flow<p>This is a very Buffet style company acquired in a very Buffet kind of way.
AceJohnny2超过 10 年前
&quot;[Proctor &amp; Gamble&#x27;s] goals in the process of exiting this business are to maximize value to P&amp;G’s shareholders and minimize earnings per share dilution.&quot;<p>It was a sick joke in Snow Crash in the 90s, and it hasn&#x27;t changed.
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gopi超过 10 年前
Buffett has every right to consider taxes as part of a investment decision and legally minimize it as much as possible. But he should quit saying that tax rates don&#x27;t matter to business decisions
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tomrod超过 10 年前
&gt; When P&amp;G released its earnings for the first quarter of fiscal 2015<p>Is the 2015 a typo, or has the financial industry operated in this quarter-ahead method for awhile?
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DonGateley超过 10 年前
Yet another brilliant cigar butt find. It would be fun as well as rewarding to be able to see through Buffet&#x27;s eyes.
WhitneyLand超过 10 年前
The tax break and branding make sense, but EBITDA seems like such a poor metric for valuation it&#x27;s hard to understand why it&#x27;s taken seriously. I&#x27;m guessing that point in the article was emphasized more by Money mag than by Buffet.
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zem超过 10 年前
is it just me, or has the page actually broken scrolling down?! that&#x27;s a whole new level of wtf.<p>edit: works in an incognito window, so it seems like some extension is blocking it, but i can&#x27;t think of anything an extension could block that should be required to simply scroll down in a block of text.
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joosters超过 10 年前
In two words: tax dodge
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