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Warren Buffett's View On Business Fair Price

In this video, Warren Buffett talks about the fair price for a business. Someone in the public asks him how to determine the fair price for a business.

He uses See's Candy as an example. Back in 1972, See's Candy sold 16 million pounds of candy for $1.95 a pound. Warren Buffett and Charlie, his partner, agreed that it was some untapped pricing power there. Those candies could sell as well for $2.25 a pound, so a 30% increase for every pound. Berkshire Hathaway Inc. paid $25 million for it. The 30% increase in pricing means more $5 million for this profitable company.

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