This one was difficult for me to understand.
In simple words, Warren Buffett is trying to tell us that every company is different. There is no need to copy anyone, and more importantly, there are times when it is acceptable if you sit and don’t take any new developments. Simple.
The big thing that Warren Buffett needs to highlight is there are some companies in which management always needs to perform. Because if there is inactivity, they will not receive the salary for that month.
Peter Lynch mentioned in his book that the best business is the most boring business. Hardly Any change. Somewhat Warren Buffett is also telling the Same.
Many companies started their life as Small and with minimal resources, but they grew big and Large; the whole world knows them. Nike, Amazon, Microsoft, Google, INFOSYS. Berkshire Hathaway was also a Small Textile company. When Warren Buffett bought the First Share of the company, the stock price was $7. So starting small is not an issue. Everyone was Small. But they know that they are different. They were not trying to copy their competitors.
When Jeff Bezos set up His company, Cadabra, which was the name of Amazon at that time, there were many companies, but they are not alive now. Why? They are different.
There are many browsers, but not everyone has the power like Google. If they Stop Their work for Five minutes and 300 seconds, traffic on the Internet will fall to half. When they started the company, hardly anyone was interested in investing in their company. Why? They are different.
I think the best example of this Tenet is Apple. Steve Jobs was not in search of keeping his JOB. He was not trying to duplicate his competitors like Microsoft or IBM.
Investopedia, one of the best finance websites, explains it correctly. Credit goes to the writer.
This tenet seeks out management teams that resist a ‘Lust for Activity’ and the lemming like duplication of competitor strategy and tactics. – Investopedia (Warren Buffett’s investing style )
