"Investors have consistently lost money by assuming that if they invest in the equity of companies engaged in a growth market it is logical that they must make money. They should take a leaf from the book of US investors in the 1970s who correctly identified air travel as a growth market and then underperformed the market by investing in airline stocks. How? Because they missed the point that the link between growth in air travel and the profitability of airlines was about to be broken by the intervention of a force called deregulation. More air miles were flown, but at lower and lower fares." --Terry Smith ("Accounting for Growth")
"Any time you get more and more people competing in any given area, generally, the economics deteriorate. And the economics have deteriorated for newspapers, although they’re still enormously profitable in relation to tangible equity employed, but they do not have the same economic prospects, if you look at the future stream of earnings, that it looked like they had 20 or 30 or 40 years ago. And television, again, the margins have been maintained surprisingly well, but the audience keeps going down.... So, that has to erode economics over time. Cable was thought to operate pretty much all by itself, and the telecoms come in. Very few businesses get better because of more competition." --Warren Buffett (2006)
"It’s simplicity itself. It will be a rare business that doesn’t have a way worse future than it had a past." --Charlie Munger (2006)
"There’s industries we know that may have a wonderful future, but we don’t have the faintest idea who the winners will be, so we don’t think about those.... So there’s a whole lot of things we don’t think about. Charlie and I have a number of filters that things have to get through very quickly before we’re willing to think about them. And sometimes we’re thought of as rude...because people will call us and they start explaining some idea to us, and it just doesn’t make it through the first filter or two. So we...think we’re saving their time if we just politely say, you know, that we just have no interest, and we don’t want to have you finish the sentence." --Warren Buffett (2012)
"We have found in a long life that one competitor is frequently enough to ruin a business." --Charlie Munger (2012)