BusinessTN

In the midst of what seems to the average Wall Street watcher an economic apocalypse, investment icon Warren Buffett raised many an eyebrow recently with his declaration that now was the time to invest in American businesses. The declaration left many wondering what the Oracle of Omaha knows that the rest of us don't.

But Buffett's confidence could have something to do with the devoted and unofficial farm teams he has scouting the country for opportunities on his behalf, one of which is right here in Tennessee. Recently, Michael Daniels and partner Adam Johnson of Knoxville-based Daniels Partnership pitched Buffett on a possible deal that got the man's attention.

For a young investor, Daniels has an impressive history with the finance wizard. As a UT-Knoxville student on a class trip to meet Buffett, Daniels pitched the investor on Tennessee-based Clayton Homes, a piece of advice Buffett followed.

This time around, Daniels and Johnson pitched Buffett on Michigan-based Chelsea Milling Co., producers of the popular muffin and biscuit mix, Jiffy Mix.

"Buffett's big quote is that an investment idea can be summed up in a paragraph, and we kept it real short and sweet," Daniels says. "We sent him a letter and a box of Jiffy Mix, and he actually wrote us back."

After studying Buffett's track record, Daniels says he had a good idea of what type of company would interest the investor. "With Buffett, it's got to be very simple, and this is."

Since 1930, the product, owned by the Holmes family, has been the dominant muffin mix across the country, today controlling 55% of the category, according to Daniels.

"This company doesn't spend a dime on advertising, but yet it has total dominant market share over all the big players like General Mils and Pillsbury, and it has better margins than anyone else because it doesn't have to advertise," he says.

Buffett's response to the partners showed his interest. "If the Holmes family should get interested in finding a friendly and permanent home for the business, just get in touch with me," the investor wrote, signing off, "I'm glad to have you two out there scouting for me. Regard it as your mission to bring me another Clayton."

Although the company's revenues turned out to be below Buffett's criteria, Daniels is currently looking for other options. He hopes companies across the state that might be interested in working with Buffett will contact him as a go-between.

"I'm probably not the only one sending him investment ideas," Daniels says. "But I like to think I'm one of the few who gets a response."