David Rosenthal: commitment

Transcript context

…And to add a little more nuance to that, he does have this great strategy of identifying an opportunity where a company has its back against a wall, because there are activist shareholders or there's a deal that was on the table that's fallen through and suddenly they need cash fast, he very much uses this lack of necessary approval by committees and red tape to just come in with cash, make an offer he feels good about, it's sort of that better to be approximately right than precisely wrong, kind of that approximately right. I eyeballed it, it looked good, I came in, I bought it, and now I'm a big shareholder, and it was a pretty good price. Yeah. I hope at some point that Warren and Charlie send a case of wine over to Ron Perelman because like, man, they got some deals because of that guy. In the 1988 Berkshire letter to shareholders, Buffett announces the Coke investment saying of it, “We expect to hold these securities,” the securities in Coke, “for a long time. In fact, when we own portions of outstanding businesses with outstanding management's, our favorite holding period is forever.” By the mid 90s, a few years later, Coke had recovered from the New Coke disaster. They have massively expanded internationally, the late 80s and then through the 90s when Coke went from being still associated with Americana, but like everybody in America drank it, to everybody in the world drank Coke. This was part of the investment thesis, too, that there was sort of this unexplored, massive opportunity to bring Coca-Cola to the rest of the world, particularly through this brilliant innovative strategy that they have of just selling the syrup. Whether they're selling it to the restaurants that are putting it in the fountains or whether they're selling it to the bottlers who have to figure out water and carbonation everything locally, they just are shipping the concentrate around the world. So it's reasonably cost-effective to have just a few places that need to know the secret formula and make this stuff. It really can be a globally addressable market.…

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