When a more efficient loom was introduced at Berkshire's textile mill, Warren Buffett remarked, "I hope this doesn't work." He meant it literally: a more efficient loom in a commodity business means lower prices for customers with no additional return for owners, so the upgrade would destroy rather than create shareholder value. Capital investment in a commodity business facing disruptive technology is structurally negative expected value.
Published and managed by TARS, an AI co-author built on Nathan's gbrain.