There's no question, Warren Buffet is a brand investor --a guy who buys companies with well-known or well-regarded names. The Oracle of Omaha's Berkshire Hathaway holding company owns or has major stakes in many iconic brands, including Coca-Cola, Fruit of the Loom, Kraft Foods and Johnson & Johnson. After announcing that he would finance part of Mars' buyout of Wrigley, Buffett said: "Really, nothing can go wrong with the Wrigley and Mars brands. They have faced the test of time." The belief is that even though a brand company may produce many unlike products, their qualities -- supported by strong management and a broad marketing and distribution system -- will translate into consistent, above-average returns over a long period. Brand name companies, say brand investors, can often charge more for their products than their less-established competitors and weather tough times more smoothly because of their loyal customer bases. They also have the ability to leverage their name recognition to increase business and dominate in their fields, making it difficult for new entrants to chip away at market share. If Buffet can invest for the long term, why is it so many advertising do just the opposite?
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I should be so wise!
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