Tracy Britt Cool, former CEO of Pampered Chef and Warren Buffett protege, discusses the condition of the business when she took over the Berkshire Hathaway subsidiary around 2014.
Opinion
Cool: Most corporate boards fail to add value to businesses
“What I find is, for the most part, most boards don't add a lot of value to the businesses, and I think they oftentimes go too deep on areas that are less critical and not enough time on the areas that are most critical that they can provide the most value.”
Opinion
Cool: Traditional private equity's 3-4 year horizon drives short-term decisions
“Traditional private equity, the focus is very short term. You know, you buy a business, you're focused on selling it three to four years later. And in doing that, I think what ultimately happens is you make short-term decisions about the businesses”
Prediction Not checkable as stated
Cool: There will not be another company like Berkshire Hathaway
“Berkshire is a phenomenal place. I mean, it's unique. It's one of a kind. I don't think there'll be another one by any means.”
Insight
Cool: Relying on EBITDA creates false confidence because D&A is real
“Our view on sort of EBITDA is there's some industries where it makes sense, but in most industries, depreciation and amortization is real, and so if you focus on that, I think you sometimes give yourself false confidence in terms of what the business really lo…”
Insight
Cool: AI is increasing tech capital intensity and raising entry barriers
“If you look at the tech businesses, historically, there wasn't a lot of capital required. Google or others, they had network effect and these other dynamics that drove the moat, and so you didn't have capital. Now with AI, that's shifting quite considerably bu…”
Opinion
Cool: Investment firms treat operating teams as second-class citizens
“Usually in a lot of firms, the operating teams are second class citizens where they're not at the same seat at the table as the investing organization.”