From Charlie Munger during the
1998 Berkshire Hathaway Annual Meeting:
I’ve heard Warren say since very early in his life that the difference between a good business and a bad business is usually the good business just throws up one easy decision after another, whereas the bad business gives you a horrible choice where the decision is hard to make. Is this really going to work? Is it worth the money?
If you want a system for determining which is a good business and which is a bad business, just see which one is throwing the management bloopers time after time after time. Easy decisions.
It’s not very hard for us to decide to open a new See’s store in a new shopping center in California that’s obviously going to succeed. It’s a blooper.
On the other hand, there are plenty of businesses where the decisions that come across your desk are just awful. And those businesses, by and large, don’t work very well.
