Warren Buffett’s Top Plays: #3 See’s Candies

In 1972-1973, Warren Buffett bought 99% of See’s Candies, a premium chocolate business, through Blue Chip Stamps for $34.7m, not $25m as reported elsewhere. The first 67% of the business cost Buffett $25m after he and Charlie Munger convinced the family controlling the business to take their offer, despite their initial asking price being $30m. The first purchase represented 18% of Buffett’s net worth and indirect purchases later added up to 44% in total. See’s Candies was purchased at a high PE of 17.5 for Buffett, but has delivered $2.3b in pre-tax profits to Berkshire over the years. The investment was pivotal for Buffett as it opened his eyes to quality businesses and allowed him to move away from solely focusing on bargains. He has referred to See’s Candies as the start of multiple new streams of cash for Berkshire.