But of course!

A fair amount of ink has been spilled in the financial press this weekend about the troubles at Kraft/Heinz and how that has impacted Berkshire Hathaway's results. The story basically goes like this: "Kraft/Heinz got pummeled because the American consumer is moving away from legacy brands like Oscar Meyer and Heinz ketchup, but these are the kinds of brands Buffett likes so therefore Berkshire's model is at risk." And we all say, "but of course, that makes all the sense in the world." And it does, and I, having read one very fat bio of Buffett plus about 50 of his roughly 55 annual letters, can attest that this thesis makes a lot of sense.

Problem is, I didn't see it coming beforehand, even though I was aware both of the ever-diminishing stickiness of American brands as consumers move more to store brands, generics, fresh food (kinda) and so on. I was also aware of Buffett's love -- thanks to the strong influence of Charlie Munger -- of a good brand.

That's because there are all too many themes, trends, and theses out there in the marketplace, and tracking and weighing any of them consistently and confidently is deucedly tricky. I'm sure there are a few gurus who saw this coming and will bask in the financial media sunshine for a few days for having done so. Some of them may have made good money placing bets here. But guessing which guru will be right cycle after cycle is its own game. It is therefore imperative that in thinking about markets, we focus on data over long periods of time and the things that have offered consistent incremental advantage, namely factors, and investor behavior.


nb. By far the best thing to have come out of the reporting of the Kraft/Heinz results was the piece in the Journal on Saturday about Buffett's Brazilian partner 3G and its practice of zero-based budgeting, how it has influenced management in consumer goods companies worldwide, and how the relentless focus on cost-control at Kraft-Heinz meant that it wasn't paying enough attention to the consumer and got hammered. That was where the wisdom was.