This is from One Up on the Wall Street
” I’d already invested in United Inns, the largest franchiser of Holiday Inns, and I was keeping my ears open for other opportunities. During a telephone interview with a vice president at United Inns, I asked which company was Holiday Inn’s most successful competitor…
““La Quinta Motor Inns,” the vice president of United Inns enthused. “They’re doing a great job. They’re killing us in Houston and in Dallas.” He sounded very impressed, and so was I…”
Peter Lynch studied the way La Quinta Motor Inns conducted its business. Then, “I followed up on this conversation by spending three nights in three
different La Quintas while I was on the road talking to other companies. I bounced on the beds, stuck my toe into the shallow end of the swimming pools (I never learned to swim), tugged at the curtains, squeezed the towels, and satisfied myself that La Quinta was the equal of Holiday Inn.The La Quinta story checked out in every detail…”
That is how he invested in the motel.
The first time I heard of Astral Pipes was from the contractor who was doing repairs on our building (big project, costing several crores). He talked of shortage of pipes as import from China had stopped (that was 2020). Among the Indian pipes he said Astral is the best.
Unfortunately, I thought it was too costly and let of an opportunity of investing in India’s best pipes manufacturer. Its PE today is 89.7. The share price has more than tripled since I heard of this company.
Our experience is personal. So is the decision to invest. Never ignore what your wife, children, friends, even your maid tell you of a company’s product or their attitude towards its customers.
Remember why the PSU banks floundered for a long time? Everybody who dealt with their employees had a tale. Its only competition that is making them mend their ways.
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