“I like products that people think about with a different part of their brain.”
Who said it/ Author:
Meaning / What does it mean:
When one thinks of Apple, Tesla, Disney or companies like that, many people really love their products. So the cost of the product is secondary to these people. As a result, their products are very sticky and they also have many repeated customers. For example, many people love the iPhone. Even though it is priced much higher than other phones, people are still willing to buy it. In addition, it is not uncommon to hear people having an emotional connection with their Teslas on social media. They say things like “I will never buy any car besides a Tesla.” If one were to think carefully, not many companies are able to have such a loyal customer base. Thus, these companies have remarkable pricing power. They are able to command a premium price for their products and people will still happily buy them. This is why Buffett loves (companies that produce) these products.