Unlike most people, Jeremy Phillips likes Warren Buffett as a businessman more than as an investor. In this video, Jeremy and Austin Smith talk about applying Buffett's business principles to J.C. Penney.

Austin quotes Buffett as saying, "When a manager with a reputation for brilliance takes a business with a reputation for poor fundamental economics, it's the reputation of the business that remains intact." This is the case with CEO Ron Johnson, who came to Penney from Apple. As Austin points out, Steve Jobs didn't have his reputation for brilliance back when he started the Apple Store. In contrast, Johnson came to Penney with a sterling reputation, but Penney has been around a lot longer than Johnson.

In short: Be careful when a white knight leader comes in, as it's not going to help a company with a dying reputation.

Austin Smith and Jeremy Phillips own shares of Apple. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.