Warren Buffett: Commodity Smart

Posted by admin on Thursday, May 21, 2020

Warren Buffett Money Quote saying that commodities don’t require much intelligence. Warren Buffett said:
 
In a commodity business, it's very hard to be smarter than your dumbest competitor Quote
 

“In a commodity business, it’s very hard to be smarter than your dumbest competitor” — Warren Buffett

 

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Warren Buffett is saying that in businesses that deal with commodities, like raw materials, it can be difficult to gain an advantage through intelligence or strategy. Since commodities are largely undifferentiated products, if your least intelligent competitor makes a mistake like selling at too low a price, it can be hard to compete with that price and still make a profit.

So Buffett is pointing out that the commodity business takes less intelligence since your success is so tied to the actions of your competitors, including any unintelligent decisions they make.

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