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Pricing power most important in business: Buffett

Warren Buffett, the billionaire CEO of Berkshire Hathaway , said he rates businesses on their ability to raise prices and sometimes doesn't even consider the people in charge. “The single most important decision in evaluating a business is pricing power,” Buffett told the Financial Crisis Inquiry Commission.

“If you've got the power to raise prices without losing business to a competitor, you've got a very good business. If you have to have a prayer session before raising the price by 10%, then you've got a bad business.” Buffett accumulated the world's third-largest personal fortune through a career of stock picks and takeovers. He has bought companies like railroads, whose pricing power stems from a dearth of competitive options available to clients. Buffett has also built stakes in firms which rely on the appeal of their brands to attract customers.



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