Buffett expresses his belief in investing only in things he understands and shares his experience with evaluating businesses based on their economic characteristics. He uses examples of industries like automobiles and airplanes to illustrate how difficult it is to predict winners and emphasizes the importance of understanding the economic consequences of a business. Buffett shares that he has always found it easier to identify losers than winners and that figuring out the economic characteristics of a successful business is not an easy task. He also mentions his old-fashioned belief that one should only invest in things they understand and that he has an understanding of the economics of certain businesses, such as chewing gum, due to their consistent nature.
“When I look at the internet businesses or tech businesses….I say this is a marvelous thing and I love to play around on the computer, and I order my books from Amazon and all kinds of things….But I don’t know who is gonna win. And unless I know who’s gonna win, I’m not interested in investing.”
