One core tenet of Buffett and Munger's investing approach is to find companies that can price their goods and services higher, which they haven't yet done. Once they exercise this ability, they will be worth much more.
Recently, an Indian listed company mentioned slower growth in the food delivery business, which sparked an interesting discussion. On speaking with a friend, he mentioned that he would stop using the food delivery apps if they stopped offering discounts. I disagreed with that, so I asked him a hypothetical question: "When you get married and invite me over for dinner, is your wife going to cook for us, or would she ask you to order? If the app shows you an insane price, will you argue with your wife or just pay the price and move on?"
Historically, men have never cooked for the household (leaving aside professional chefs), and now there's a whole generation of women who believe cooking is beneath them, who think it's akin to oppression/slavery and would refuse to learn it. They are still in the minority among people who run households, yet their growth rates are high. Ten to twenty years from now, they will be in the majority. Food delivery companies can't exercise this pricing power just yet, because the old guard is still in charge of running the household, and these companies have to survive just long enough to see the old guard replaced.
The devil didn't even need to convince women. They convinced themselves through friendly big sister advice dispensed through social media. They are willing to trade additional disposable income and relinquish their cooking ability. That additional household income is the source of untapped pricing power.
You see the Nifty 50 and the Nifty Next 50 companies (top 100 listed companies of India) target wallet share, which is a fancy, subtle and non-threatening way of saying, "How much of your income do you spend on us, and how indispensable are we to you?" In fact, I call it the Nifty 50 game. Trust me, it's a real privilege to play this game. There's no other game I feel as excited to play as this. I am hoping I get invited someday, fingers-crossed 😜
I believe if Jeff Bezos were pitching food delivery companies' stock, he would call it:
Your inability to cook is my opportunity.
Also, why bother arguing online about Mrs movie, when you can open a brokerage account and benefit from it? Your long-term profit/loss statement will tell you whether you were right or wrong. The market also has an incredible ability to make you realise there's no point arguing with the market.
By the way, I know how to cook, and I love to cook. I love simple meals that don't take a whole lot of time. When I was staying in Bangalore, I didn't appoint a cook. I had a house help who would cut fruits and vegetables, but I would prefer to do the main chef work myself, and I would invite my friends and cook for them. In fact, I like to be the head of the kitchen and make things as I see fit; sometimes my mom steals my thunder, but then she is special ❤️ Food delivery companies won't be able to exercise their pricing power on me, would you let them do it on you?
If you don't know how to cook, are you really independent, or are you make-believe independent?
Disclosure: I don't hold food delivery companies' stock in my portfolio, but I may or may not buy them in future.