RH (NYSE: RH), formerly known as Restoration Hardware, counts Warren Buffett as its fifth largest shareholder, which is fitting as the home furnishing company is modeled in part after Buffett's Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B).
RH Is One Part Berkshire
Similar to Apple, RH is building out an integrated ecosystem of products, places, services and spaces to "amplify and render our brand more valuable," he said. LVMH makes it clear the only way to earn luxury margins is through selling luxury goods.
Similar to Buffett's empire, Friedman said RH is building a business that's not only capital efficient but generates significant cash flow with industry leading returns.
China Makes Some Of The Best Products
Many people like to brush off Chinese made goods as inferior but Friedman said he doesn't see it that way. One of the best examples is the iPhone, which is one of the "best products in the world."
The CEO believes China will remain a supplier of products to the U.S. despite current uncertainties in the trade war. In the meantime, the company is trying "not to overreact" to geopolitical events outside of its control.
"We take a long-term view," he said. "Long term, we think China is still part of the mix."
Q3 13F Roundup: How Buffett, Einhorn, Ackman And Others Adjusted Their Portfolios
Analysts Agree: Nothing To Restore With RH Stock
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