man 1: One said you cover half of it which is trying to understand the business and buying the business but you also loaded to getting the return on the amount of capital you invest in the business as an investor and that comes back the way you paying for the business, how to do determine, what do think is fare price to pay for the business?
Man 2: It is a tough thing to decide but, I do not want to buy and then because I am not terribly sure of. So if I am terribly sure of it, it probably going to offer incredible returns. I mean, why should something that is essentially a synch to do well, offer you 40% a year something like that.
So, we do not have usual returns in mind. But we do have in mind that we are loosing anything. I mean, we want Seas Candy in 1972.
Seas Candy was unselling 16 Million pounds of candy and a $1.95 a pound and it was making two bits a pound or $4 Million free-tax. We pay $25 Million for more than that. Tipnal Capital was speak of it.
Now more of that business is basically my partner Charlie and I really decide were there was a little topped pricing power there, and others whether that $1.95 box of candy could just easily sell for 2 or 2 and a quarter.
Because sell for 2 and a quarter, another 30 cents a pound was 4 Million made of 16 Million pounds, which on a 25 Million purchase price was fine. We did not do any,
We never hire a consultant in our lives, I mean with idea of consulting is gone by box of candy?
(Laughing)
Man 2: But what we did no was they had share of mind in California, I mean there was something special,
Every person in California is something in there mind about Seas Candy and overwhelmingly was favorable.
They have taken a box, Valentines Day and get make some girls; she kissed him. If she slap them, we have no business but,
(Laughing)
Man 2: As long as she kisses him, that is what we want in their mind. “Seas Candy, Getting Kissed”. And if we can get that in the minds of people, we can raise prices. And I bought that in,
(Laughing)
Man 2: I bought in 1972, we raised every year. I raise the price on the December 26, raised it the day after Christmas so everybody, could we sell a lot of Christmas back, we make $60 Million this year. We sell 30 Million Lbs, make few hour a Lbs.
Same business, same formulas, same everything, $60 Million, still does not take any capital. And, we make more money 10 years from now.
But of that $60 Million, we make about $55 Million in the 3 weeks before Christmas and our company song is “What a friend we have in Jesus”. I mean,
(Laughing)
Man 2: It is good business!
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