Jeremy Phillips asks Austin Smith to outline Smith's "Warren Buffett Roadmap." Smith begins by saying that he'll only invest in companies for which the window of buying opportunity is short. This strategy forces him to buy companies that he'll be happy holding for the long run. These tend to be companies with pricing power.
Above all, Smith says that brands matter. They allow companies to pass on price increases in good times and bad. Companies such as Coca-Cola (NYSE: KO ) , Philip Morris (NYSE: MO ) , and Unilever (NYSE: UL ) have this ability.
If you follow this rule, you'll identify the best-performing stock of the last 50 years. The company? Altria (NYSE: PM ) , which boasts a chart that's basically linear. Altria's products haven't changed much, but their brands have remained solid. Needless to say, the company has phenomenal pricing power.
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