During his recent interview with Interactive Investor, Bill Ackman provided a few examples of some of the best businesses that have pricing power. Here’s an excerpt from the interview:
Ackman: Yeah, and I think we own them.
You know, if you look at our businesses, we love businesses that have kind of royalty-like characteristics. Universal owns a royalty on music, so if Spotify raises prices, we get an immediate benefit.
Restaurant Brands owns a royalty on, Burger King hamburgers and a Coke and a fry or a Popeye’s chicken sandwich, and if they raise prices, we get a royalty, an immediate benefit from that.
And the same thing is true for Hilton, as room rates go up, that’s, you know, again, and hotel real estate is really the only real estate where you can reprice your rents every day, which is good in a world where you think hotel rents or room rates, our so-called red bar is going to go up over time.
So I think we own, we’ve always been interested in owning assets and companies with pricing power, and the best businesses in the world have pricing power. And we always wanted to own businesses that were protected from inflation, but we never had inflation, and so, now we do and we’re glad we own what we own.
You can watch the entire discussion here:
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