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Warren Buffet Explaining What Are The Economics of a Franchise

by CFD Guru Team   ·   

Warren Buffet on Economic Franchise 

Warren Buffet, Berkshire Hathaway ($BRK.B) chairman and CEO writing about the economics of a franchise (from 1991 letter to investors):

An economic franchise arises from product or service that: (1) is needed or desired; (2) it thought by its customers to have no close substitute and; (3) is not subject to price regulation.
The existence of all three conditions will be demonstrated by a company’s ability to regularly price its product or service aggressively and thereby to earn high rate of return on capital.

There is no question that $AAPL in buffet eyes, tick all of these conditions.