“In some businesses, you can have only two competitors and they’re still terrible businesses—they beat each other’s brains out. And sometimes they end up competing to do very stupid things. You can argue that that’s what happened with Freddie Mac and Fannie Mae. I mean, enormous companies that had a huge advantage over everybody else, but they still, in their battle to both report higher earnings every quarter and to beat the other guy out, drove prices for insuring loans down to the improper levels, and did a lot of other stupid things, too. So you do see certain industries where once they get down to a very few companies, do extremely well. And you see other industries where, even when they get to be two of them, they don’t do that that well.” —Warren Buffett
Links - 12/7/2020
Links - 12/7/2020
Links - 12/7/2020
“In some businesses, you can have only two competitors and they’re still terrible businesses—they beat each other’s brains out. And sometimes they end up competing to do very stupid things. You can argue that that’s what happened with Freddie Mac and Fannie Mae. I mean, enormous companies that had a huge advantage over everybody else, but they still, in their battle to both report higher earnings every quarter and to beat the other guy out, drove prices for insuring loans down to the improper levels, and did a lot of other stupid things, too. So you do see certain industries where once they get down to a very few companies, do extremely well. And you see other industries where, even when they get to be two of them, they don’t do that that well.” —Warren Buffett