Once a company loses its competitive advantage, it is very rare that it can regain it, according Warren Buffett. He has seen it on occasion, but he certainly wouldn’t bet on it.
“In terms of competitive advantage and then regain — lost and then regained — there aren’t many examples of that,” Warren Buffett said at the 2003 Berkshire Hathaway Annual Meeting. “I’ve got a friend who always wants to buy lousy companies with the idea he’s going to change them into wonderful companies. And I just ask him, you know, ‘Where in the last hundred years have you seen it happen?’”
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© 2021 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.