Between inspirations, tips and lessons, billionaires Warren Buffett and Jorge Paulo Lemann have plenty to share after decades of living in the business world. Nitin Nohria, a former member of the renowned Harvard Business School, conducted an interview with these two entrepreneurs that resulted in a series of highlights, published by the “ValueWalk” news site.
Here are 5 highlights of the interview with billionaires Warren Buffett and Jorge Paulo Lemann:
1. Investments by Warren Buffett
The billionaire plans to invest in companies whose business he is able to understand, that are within his area of competence and that will progress and stand out in the next 10 or 20 years. He wants to invest in companies that are safe, like a castle protected by a moat.
The billionaire likes products that cost 1 cent are sold for 1 dollar and are part of people’s habits. Coca-Cola is an example. In addition, most companies that meet these criteria are regulated.
2. The value of brands in each region
Coca-Cola is a brand that sells well in all countries, unlike brands like Hershey and Cadbury. For example, Candy sells well in California, but not on the East Coast of the United States. The person who wants a Snickers bar in that area, for example, will be willing to pay a higher price for it, instead of buying a replacement.
3. Investments of Jorge Paulo Lemann
Brazilian billionaire Jorge Paulo Lemann of 3G Capital builds companies to manage in the long term. The beer industry, for example, is not growing in the US and Europe. But Africa presents a good development opportunity, especially with the purchase of SAB Miller by AB InBev.
The continent has a large population growth of young and warm climate – ideal for the sale of the drink. 3G Capital also plans to become an expert in marketing and developing new products. There is not much to be done in the beer market through new acquisitions, but there is still a lot to be done in the food industry.
4. The fate of the largest US companies
Billionaires were asked if the largest US companies in market value – technology giants like Apple, Alphabet, Google, Amazon, and Facebook – tend to remain the largest in the future. Buffett pointed out that these companies have no tangible assets or receivables (money owed to the company derived from the sale of credit products or services), and said that together they are worth $2 trillion.
This is a very different market model compared to the past decades – in addition, candy companies do not require capital. But despite all that, with technology, things change quickly.
5. Free trade agreement
Buffett emphasized that free trade is extremely important. It is the market system for the world. Those who are disadvantaged by it would be helped by means of an income tax credit.