Warren Buffett’s Top Plays: #11 General Foods

LIVE
 / 
  • Speed1
  • Subtitles
  • Quality
Quality
    Speed
    • Normal (1x)
    • 1.25x
    • 1.5x
    • 2x
    • 0.5x
    • 0.25x
    Subtitles
      🔉🔉🔉 CLICK TO UNMUTE 🔉🔉🔉
      • Copy video url at current time
      • Exit Fullscreen (f)
      0:00
      PRIVATE CONTENT
      OK
      Enter password to view
      Please enter valid password!

      Lesson summary:

      In the 1980s, General Foods was a major player in American supermarkets, owning brands such as JELL-O, Maxwell House coffee, Birds Eye frozen peas, Cool Whip, and others that were the number 1 in their respective categories. Berkshire Hathaway, owned by Warren Buffett, acquired 9% of the company for $150 million between 1979 and 1983. In 1985, Philip Morris merged with General Foods in a $5.6 billion deal, and Berkshire made $338 million from the investment, including a buyback in 1984, for a return of 240%. In his 1985 letter to Berkshire shareholders, Buffett cited four factors for this successful investment: a low purchase price, a business with good economics, management that focused on shareholder interests, and a buyer willing to pay full business value. This investment highlights the profitability of owning the number 1 brands, even in small niches.

      WELCOME BACK

      INSTANT GUEST MEMBERSHIP ▸ FREE FOREVER ACCESS EVENTS, EDUCATION & MORE

      BLOOMBERG GLOBAL NEWS

      Bloomberg video news feed with live charts, watchlists & fundamentals
      Audio/video feed with live charts, watchlists & fundamentals
      CHARTS + FEED

      RBA ECONOMIC UPDATES

      Periodic updates on the Australian economy, direct from the RBA, with live charts, watchlists & fundamentals
      Audio/video feed with live charts, watchlists & fundamentals
      CHARTS + FEED

      US FEDERAL RESERVE UPDATES

      Bloomberg News focussed upon the Federal Reserve, with live charts, watchlists & fundamentals
      Audio/video feed with live charts, watchlists & fundamentals
      CHARTS + FEED

      FX/GLOBAL BRIEFS

      Brief global updates with a focus upon currencies, with live charts, watchlists & fundamentals
      Audio/video feed with live charts, watchlists & fundamentals
      CHARTS + FEED

      ASX MARKET UPDATES

      ASX-focussed updates, with live charts, watchlists & fundamentals
      Audio/video feed with live charts, watchlists & fundamentals
      CHARTS + FEED

      BLOOMBERG BRIEFS

      Global briefs from Bloomberg with live charts, watchlists & fundamentals
      Audio/video feed with live charts, watchlists & fundamentals
      CHARTS + FEED