저자: 미상 · 외국인
요약 보기
워런 버핏의 4가지 투자 필터(이해 가능한 사업, 장기 전망, 정직하고 유능한 경영진, 매력적인 가격)를 See's Candies 인수 사례로 설명하는 교육용 영상. 특정 종목 매매 추천이 아니며 영상 자체가 개별 투자 권유가 아님을 명시함. 시장 가격 방향에 대한 예측 발언은 없음.
다듬은 글
In 1972, Warren Buffett bought a chain of chocolate shops in California for 25 million dollars and it became one of his best deals ever. Five years later, he wrote down four filters he wants any business to pass. And the fourth one very nearly cost him those chocolate shops over a gap of 5 million dollars.
In this video, I'll use that candy company to walk you through all four so you can analyze stocks yourself. The first filter from his 1977 letter to shareholders is a business that we can understand. People often take that as advice to buy simple companies. Although what Buffett means is narrower. It means you can explain how this particular company makes its money.
The chocolate company was See's Candies, a family business that opened its first shop in Los Angeles in 1921. By 1972, it was making about 4 million dollars a year before tax. And See's passed this first test easily. You cook chocolates in a kitchen and sell them over a counter. The customer pays cash on the spot so nobody owes you money at the end of the month.
The candy doesn't sit in a warehouse for long either because it goes from the stove to the shop quickly. Buffett points to both of those details as the reason See's needed so little money to run. Technically, the buyer was Blue Chip Stamps, a company Buffett and his partner Charlie Munger controlled and later merged into Berkshire.
Next time you're looking at a company to invest in, try explaining out loud without looking anything up where the company's money comes in and where it goes. Then say what would have to happen for that money to stop coming in. If you can't, that company is outside what Buffett calls your circle of competence.
He said the size of that circle isn't very important, but knowing where its edge is matters a lot. For decades, he put technology outside his, and he kept saying so while tech stocks went up without him. Filter two is favorable long-term prospects. In plain words, will this company still be earning good money in 10 or 20 years?
Most people hear that as a question about growth, and See's barely grew at all. Americans don't eat more boxed chocolates as the years go by, and plenty of famous candy brands have simply vanished. See's sold 16 million pounds of candy the year Buffett bought it. 35 years later, it sold 31 million pounds, which is growth of about 2% a year.
That's about as slowly as a business can grow without shrinking. What See's had instead was customers who wouldn't switch. Buffett described it as a pervasive favorable reputation with consumers based upon countless pleasant experiences. That's probably the most Buffett way anyone has ever described a box of chocolates.
In practice, it meant See's could raise its prices a little every year, and people kept buying. Buffett later wrote that they could see this untapped pricing power when they bought it. Buffett pictures a business earning high profits as a castle, and competitors will keep attacking it. So, it needs a moat.
For some companies, the moat is being the cheapest. The way Buffett described Costco. For See's, it was the name. A rival could open a chocolate factory next door, but it couldn't copy 50 years of Californians getting a box from their grandmother. The results are a little ridiculous. By 2007, See's was making $82 million a year before tax.
Buffett reckoned a normal company growing its profits like that would have needed about $400 million of new capital. See's needed 32 million. So almost everything it earned went up to Berkshire to buy other businesses. Buffett compared it to Adam and Eve, starting something that led to 6 billion humans.
A later letter just says, "Envision rabbits breeding." When you analyze a stock, ask what stops a richer competitor from copying the business. A good sign is a company that has raised its prices for years without losing customers. If the only answer is a great product right now, that usually isn't enough because great products get copied.
Third, Buffett wants the company operated by honest and competent people. And he treats those as two separate checks. At See's, the family was leaving. So somebody new had to run the place. They picked Chuck Huggins, the company's executive vice president, and put him in charge the day they took over.
He ran See's for the next 34 years. When Buffett praised him, he said Chuck measured his success by how satisfied the customers were. Competent is the easier check because you can see it in the results. And the [snorts] 1977 letter shows how Buffett reads them. Berkshire's earnings per share went up 37% that year, and he told shareholders not to get excited.
The money invested in the business had grown by 24% too. So the number he cared about was the 19% return on that money. A savings account shows why. Leave a thousand dollars in one and never touch it. The balance hits a record high every single year, and you've done nothing at all. A company that keeps its profits can grow its earnings per share the same way without getting any better.
See's did the opposite, sending nearly every dollar back to its owners while its profits kept climbing. When you read a company's annual results, look for the return on the money it keeps, and treat rising earnings on their own with some suspicion. Honest is much harder to judge from the outside, and I think that's why Buffett keeps coming back to it.
The best test I know is whether managers tell you about their mistakes in writing before anyone forces them to. Buffett passes that test himself. In the letter where he first wrote down the four filters, Berkshire's own textile business, which was how the company started, has another very poor year.
He admits they'd wrongly predicted better results 2 years running. Then he adds that this may say something about our forecasting abilities, the nature of the textile industry, or both. 30 years later, he announces that it's confession time, and calls every mistake on his list an unforced error. The first one is that he almost blew the See's purchase.
Before you invest in a company, read the chief executive's letter to shareholders from its worst recent year. If the bad news is plain and near the top, that's a good sign. If it's buried on page 40 or blamed on the economy, you've learned something, too. The last filter asks for a business available at a very attractive price.
And it makes sense that it comes last. You judge the business first, and only then the price. It's the one he nearly got wrong with See's because of how he'd learned to invest. His teacher, Ben Graham, bought companies so cheap that even a bad one would leave you something. Buffett compared it to picking a soggy cigar butt up off the street because it still had one free puff left in it.
Berkshire Hathaway itself was one of those butts, a New England textile mill his partnership started buying in 1962 at $7.50 a share. That was far below what its assets were worth on paper, but it was cheap for a very good reason, which was that it wasn't a good business. Munger kept pushing him to buy great businesses at fair prices instead.
Buffett admits he found that hard to hear from a lawyer who'd never spent a day in business school when he, ahem, had attended three. Buffett later called 1972, the year of See's, a turning point. The family wanted $30 million. And Munger said it was worth that. Buffett wouldn't go above 25, which was already three times the value of the assets on See's books.
To a cigar butt man, that felt like paying three times the sticker price. And he wrote that it made him gulp. Luckily, the sellers gave in and took 25. Munger was right because the better yardstick for a price is what a business earns, not what it owns. See's earned about $2 million after tax each year.
So, 25 million was roughly 12 years of profit. And this was a business that could keep raising its prices for decades. By 2014, it had earned $1.9 billion before tax. In scratch card terms, he was haggling over paying $5 or $6 for a ticket that would eventually pay out 380. That doesn't mean price stops mattering.
In 1975, 3 years after See's, Buffett bought Wambec Mills, another New England textile company, because it was a bargain. It closed down not many years later. In 2014, he wrote that the northern textile industry is finally extinct. So, he added, "Nobody needs to panic if they hear he's been spotted wandering around New England." Buffett never stopped haggling, either.
In 1999, he held out at $35 a share for MidAmerican Energy for several days. Then, he finally caved to $35.05, so the bankers could tell their client they'd wrung the last nickel out of him. Telling that story, he called himself a one price guy and added, "Remember Sees? A bad business stays bad, however cheaply you buy it.
A great one can still be a poor investment if you pay so much that you've already paid for the next 30 years of its profits. On any stock you're weighing up, set the price against what the company earns, never against what the share cost last month." Put back together, the sentence from 1977 says he wants a business that's one that we can understand with favorable long-term prospects, operated by honest and competent people, and available at a very attractive price.
He was still using nearly the same list in 2007, but one change stands out. A very attractive price had become a sensible price tag. A chain of chocolate shops taught Buffett what that last rule really means. And I think it's the best $25 million he ever spent. None of this is a tip on what to put in your portfolio, by the way.
I don't know your situation, and even Buffett only got Sees because the sellers blinked first. If you want to see where Buffett's kind of investing sits next to four other ways of buying a stock, that's my video, The Investor Letter. The letters are all free on Berkshire's website. 1977 is a good one to start with, and it's short.
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