{"id":2723,"date":"2014-07-27T22:42:40","date_gmt":"2014-07-27T15:42:40","guid":{"rendered":"http:\/\/yup.edu.vn\/?p=2723"},"modified":"2015-09-06T00:13:31","modified_gmt":"2015-09-05T17:13:31","slug":"got-chan-achilles-cua-buffett","status":"publish","type":"post","link":"https:\/\/yup.edu.vn\/en\/got-chan-achilles-cua-buffett\/","title":{"rendered":"Buffett's \u2018Achilles' heel\u2019"},"content":{"rendered":"<h2 class=\"sapo\">For \u2018legendary investor\u2019 Warren Buffett, there is one investment sector where his returns have been \u2018truly terrible\u2019: retail.<\/h2>\n<p><img decoding=\"async\" class=\"aligncenter\" src=\"http:\/\/cafef.vcmedia.vn\/Images\/Uploaded\/Share\/40286d7b2e4618f9b6b557f6eb959bb7\/2014\/07\/25\/BNDS4810716buG20140716154850\/got-chan-achilles-cua-buffett.jpg\" alt=\"\" \/><\/p>\n<p>&nbsp;<\/p>\n<div id=\"mainDetail\" class=\"postdetail\" style=\"color: #000000;\">\n<div id=\"mainDetailV2\" class=\"mainDetailV2\">\n<div id=\"ctl00_contentLeft_ucNewsDetail1_divNewsContent\" class=\"content\">\n<div class=\"contentbody\">\n<div>Berkshire Hathaway Inc.\u2019s Investments in Retailers, from See\u2019s Candies to Ben Bridge Jeweler and Nebraska Furniture Mart, Have Received Little Attention from Investors and Analysts.<\/div>\n<div><\/div>\n<div>Although these companies are still profitable, the retail sector continues to puzzle billionaire Buffett and his partner Charlie Munger. For years, they have complained about\u00a0<strong>unfortunate experiences when investing in retail<\/strong>. They discussed failures in this field at annual shareholder meetings and in press interviews. More recently, the two, famously unenthusiastic about technology, discussed how Internet trends are rapidly reshaping shopping preferences and affecting Berkshire in unexpected ways.<\/div>\n<div><strong>\u00a0<\/strong><\/div>\n<div><strong>5 retail companies contribute about 2% of Berkshire's total annual revenue of USD 182 billion.\u00a0<\/strong><\/div>\n<div><\/div>\n<div>Buffett\u2019s retail difficulties date back to Berkshire\u2019s early days. In a 1989 letter to investors, he called the 1966 acquisition of Hochschild Kohn \u2018one of the group\u2019s biggest mistakes.\u2019<\/div>\n<div><\/div>\n<div>Recently, Buffett also admitted that retail is a truly challenging field. Consumers' shopping habits and sales channels are changing rapidly, making it difficult for businesses to build and maintain competitive advantages (what Buffett calls an \u201ceconomic halo\u201d).<\/div>\n<div><\/div>\n<div>Over the years, Buffett has assembled a \u201ccollection\u201d of small retail companies, but their \u201cglow\u201d seems to be fading because of the internet.<\/div>\n<div><\/div>\n<div>Like many other investors,\u00a0<strong>Buffett could not predict that extraordinary technological changes would have a major impact on the retail industry.\u00a0<\/strong>This is the assessment of David Kass, a finance professor at the University of Maryland and a Berkshire shareholder.<\/div>\n<div><img decoding=\"async\" src=\"http:\/\/cafef.vcmedia.vn\/Images\/Uploaded\/Share\/40286d7b2e4618f9b6b557f6eb959bb7\/2014\/07\/25\/MICE011BUFFTEDV20140716215558\/got-chan-achilles-cua-buffett.jpg\" alt=\"Buffett&apos;s &apos;Achilles&apos; Heel&apos; (1)\" width=\"263\" align=\"right\" \/><\/div>\n<div><\/div>\n<div>Buffett particularly admires someone he believes spotted this trend years ago: Amazon.com CEO Jeff Bezos.<\/div>\n<div><\/div>\n<div>Last year, when Bezos negotiated to buy The Washington Post from Graham Holdings Co., Buffett, a longtime adviser to the newspaper, told CEO Don Graham that Bezos was \u201cAmerica\u2019s best CEO.\u201d<\/div>\n<div><\/div>\n<div><strong>Given Buffett's style, it is hard to believe he is making his subordinates follow Amazon's approach.<\/strong>\u00a0However, some say they are gradually countering online competitors while acquiring companies outside traditional channels.<\/div>\n<div><\/div>\n<div>Brad Kinstler, who heads See\u2019s Candies, said the company would launch a new website in early 2015 and strengthen its social media presence. \u201cWe are addressing this in the way consumers want, whether that is ordering online and coming to buy or receiving delivery at home,\u201d he said. E-commerce currently accounts for only about 5% of See\u2019s total revenue of 400 million USD, but is growing rapidly.<\/div>\n<div><\/div>\n<div>Ed Bridge, CEO of Ben Bridge Jeweler, says his company is working to strengthen online marketing.<\/div>\n<div><\/div>\n<div>In 2007, Berkshire\u2019s 8 retail companies contributed USD 3.4 billion in revenue and USD 274 million in pretax profit to the group. By 2012, revenue had increased 8% to USD 3.7 billion, while profit rose 11% to USD 306 million. Last year, their share increased significantly thanks to the acquisition of Omaha-based retailer Oriental Trading.<\/div>\n<div><\/div>\n<div>Buffett did not detail the Internet's impact on Berkshire's retail businesses, but in his 2013 annual letter, he said some companies in the manufacturing, service, and retail group \u201chad very poor profits because of serious mistakes in capital allocation.\u201d \u201cI did not lose my way; I simply misjudged the industry.\u201d<\/div>\n<div><\/div>\n<div>Berkshire's retail stock investment record is also mixed. While Wal-Mart and Costco have delivered good results,\u00a0<strong>Berkshire sold part of its stake in the British supermarket chain Tesco because the company was losing market share.\u00a0<\/strong><\/div>\n<div><\/div>\n<div>4 home-furnishing brands are the retail group's bright spots. With 2 current stores and 1 planned to open next year, Nebraska Furniture Mart generated about USD 900 million in revenue last year, up 12.5% from 2012.<\/div>\n<div><\/div>\n<div>According to<strong>\u00a0Thu H\u01b0\u01a1ng<\/strong><\/div>\n<div><em>CafeF\/Tr\u00ed Th\u1ee9c Tr\u1ebb<\/em><\/div>\n<p><em>\u00a0<\/em><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div style=\"color: #000000;\"><\/div>","protected":false},"excerpt":{"rendered":"<p>\u0110\u1ed1i v\u1edbi \u201cnh\u00e0 \u0111\u1ea7u t\u01b0 huy\u1ec1n tho\u1ea1i\u201d Warren Buffett, c\u00f3 m\u1ed9t l\u0129nh v\u1ef1c \u0111\u1ea7u t\u01b0 m\u00e0 nh\u1eefng g\u00ec \u00f4ng thu \u0111\u01b0\u1ee3c l\u00e0 nh\u1eefng \u0111i\u1ec1u \u201cth\u1eadt s\u1ef1 t\u1ed3i t\u1ec7\u201d. \u0110\u00f3 ch\u00ednh l\u00e0 l\u0129nh v\u1ef1c b\u00e1n l\u1ebb. &nbsp; Nh\u1eefng kho\u1ea3n \u0111\u1ea7u t\u01b0 c\u1ee7a Berkshire Hathaway Inc. v\u00e0o c\u00e1c c\u00f4ng ty b\u00e1n l\u1ebb &#8211; t\u1eeb See\u2019s Candies cho [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[134,16,22],"tags":[],"class_list":["post-2723","post","type-post","status-publish","format-standard","hentry","category-article","category-bao-chi","category-tin-tuc-bao-chi"],"_links":{"self":[{"href":"https:\/\/yup.edu.vn\/en\/wp-json\/wp\/v2\/posts\/2723","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/yup.edu.vn\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/yup.edu.vn\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/yup.edu.vn\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/yup.edu.vn\/en\/wp-json\/wp\/v2\/comments?post=2723"}],"version-history":[{"count":1,"href":"https:\/\/yup.edu.vn\/en\/wp-json\/wp\/v2\/posts\/2723\/revisions"}],"predecessor-version":[{"id":2724,"href":"https:\/\/yup.edu.vn\/en\/wp-json\/wp\/v2\/posts\/2723\/revisions\/2724"}],"wp:attachment":[{"href":"https:\/\/yup.edu.vn\/en\/wp-json\/wp\/v2\/media?parent=2723"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/yup.edu.vn\/en\/wp-json\/wp\/v2\/categories?post=2723"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/yup.edu.vn\/en\/wp-json\/wp\/v2\/tags?post=2723"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}