Poor Charlie's Almanack_ The Wit and Wisdom of Charles T. Munger, Expanded Third Edition by Charles T. Munger Peter D. Kaufman Ed Wexler Warren E. Buffett

Author:Charles T. Munger, Peter D. Kaufman, Ed Wexler, Warren E. Buffett
Language: eng
Format: epub
Published: 2018-09-30T16:00:00+00:00

In essence, we are going into the business of creating and maintaining conditioned reflexes.

A big question, of course, is whether four cents per serving is a reasonable profit target for 2034. And the answer is yes if we can create a beverage with strong universal appeal. One hundred fifty years is a long time. The dollar, like the Roman drachma, will almost surely suffer monetary depreciation. Concurrently, real purchasing power of the average beverage consumer in the world will go way up. His proclivity to inexpensively improve his experience while ingesting water will go up considerably faster. Meanwhile, as technology improves, the cost of our simple product, in units of constant purchasing power, will go down. All four factors will work together in favor of our four-cents-per-serving profit target. Worldwide beverage-purchasing power in dollars will probably multiply by a factor of at least forty over 150 years. Thinking in reverse, this makes our profit-per-serving target, under l88r conditions. a mere One fortieth of four cent or one tenth of a cent per serving this is an easy to exceed target as we start out if our new product has Universal appeal

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