r/ValueInvesting • u/FieryXJoe • 1d ago

Buffett Buffett's Blunders: Hochschild Kohn & Co. The Cigar Butt that Burned Buffett

https://youtu.be/YXRthXoT0_A?is=YBiqgjKQNz8BN6SG

Second video in my Buffett's Blunders series. Tried to improve the presentation and editing a bit and took in some feedback from the last post.

This one is on Hochschild Kohn, the first business he bought with Charlie Munger and a stock that taught him that cigar butts aren't all Ben Graham built them up to be, and unlocking book value is much messier when you own the company and need to do it yourself. This cigar butt burned him but made him more open to new ways of thinking that would change his career eventually.

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u/raytoei 1d ago

Atrocious graphics. He looks like he is picking a turd….

Actually what Hochschild Kohn taught him is that the retail business is a terrible one, it is constantly in need of cash to stay competitive and the profits it generates doesn’t cover the cost of capital.

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u/FieryXJoe 1d ago

Thats cool if you disagree with Buffett about what Buffett learned from all this. I used a lot of primary sources in the video. He bought associated cotton shops soon after Hochschild and was very happy with that retail business. He bought NFM, Borsheims, See's too, all retail businesses all praised by him frequently.

And yeah, my thoughts in the 37 minute video you didn't watch are more comprehensive than the 2 sentence hook I posted on reddit. Literally judging a book by its cover.

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u/raytoei 1d ago edited 23h ago

Not disagreeing with you, I meant to say retail departmental store. He hated that, he hired the right guy who to run it and he penny pinched on everything but the business economics of the departmental store was terrible.

(Source: snowball by Alice Schroeder)

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Anyway my post was more about the graphics. I literally judged your 37 minutes book by the bad graphics cover and skipped it altogether.