[hobofan]

> One of the operating assumptions behind BK's acquisition is that the business does well regardless of management

Is that the case? I am currently reading the collection of Warren Buffets' Annual Letters to the Shareholders (https://www.amazon.com/Berkshire-Hathaway-Letters-Shareholde...) and in every letter, he attributes a significant part of the success of their companies to good management.

[nrao123]

He likes to praise his management and his management is sometimes good. BUT - when he buys or invests in a business - he wants to only do it such that ROI will work even if the management is not good. Thats the difference between a tech small business where the founder / product guy has to be switched on and be excellent otherwise - your business goes haywire. Here is an example off Buffett and his thinking on management:

I knew nothing about the management of Moody's. The - I've also said many times in reports and elsewhere that when a management with reputation for brilliance gets hooked up with a business with a reputation for bad economics, it's the reputation of the business that remains intact.

If you've got a good enough business, if you have a monopoly newspaper, if you have a network television station - I'm talking of the past - you know, your idiot nephew could run it. And if you've got a really good business, it doesn't make any difference.

http://www.businessinsider.com/warren-buffett-good-business-...

[0898]

"I always used to tell Gates that a ham sandwich could run Coca-Cola" [Buffett]

[tim333]

He prefers business any idiot could run but buys other ones as well such as IBM and some airlines recently.

[Nomentatus]

From my reading this year: starting out, with his mentor, he invested in companies with poor management the could be improved. He dropped that practice long ago, however, in favor of buying good management along with a good business. Management parachuted in often does badly, since every business is different. He does look for businesses with an edge (such as a brand) that will persist, quite true; even when he doesn't understand exactly what that persistent edge in the market is (he or Munger gives the example of breakfast cereal, that way.)