Words to Start the Week (April 8, 2025)
Nuggets from past notes
”The other big missing variable in all of this is pricing. I’ve talked in public about this before. What I don’t hear from companies is, “Oh, we don’t think we have a moat.” What I hear from companies is, “Oh, we have an awesome moat, and we’re still going to price our product cheap, because we think that’s somehow going to maximize our business.” I’m always urging founders to raise prices, raise prices, raise prices. First of all, raising prices is a great way to flesh out whether you actually do have a moat. If you do have a moat, the customers will still buy, because they have to. The definition of a moat is the ability to charge more. And so number one, it’s just a good way to flesh out that topic and really expose it to sunlight. And then number two, companies that charge more can better fund both their distribution efforts and their ongoing R&D efforts. Charging more is a key lever to be able to grow. And the companies that charge more therefore tend to grow faster.”
- Elad Gil
“Occasionally, markets and/or the economy will cause stocks and bonds of some large and fundamentally good businesses to be strikingly mispriced. Indeed, markets can - and will - unpredictably seize up or even vanish as they did for four months in 1914 and for a few days in 2001. If you believe that American investors are now more stable than in the past, think back to September 2008. Speed of communication and the wonders of technology facilitate instant worldwide paralysis, and we have come a long way since smoke signals. Such instant panics won’t happen often - but they will happen.”
- Warren Buffett (2023 Shareholder Letter)
“In good times, people become convinced that good times will continue forever. In bad times, they lose all faith. But cycles always reverse. When we’re getting benefit with no pain, it’s usually just a matter of time before the pain comes.”
“The best opportunities aren’t always the most obvious or prestigious. But they’re the ones that matter.”
“The biggest challenge is not getting greedy when others are greedy, or scared when others are scared. That’s why most people don’t do well.”