Monopolies

To Find Moats Look For Monopolies And Consolidating Industries

Buffett’s greatest insight is that monopolies, duopolies, and oligopolies face little competition and little threat of new entrants. Companies that dominate their industries represent toll roads in your daily life. Every time you do anything in your daily life, you are sending part of your paycheck to monopolists.

Q4 hedge fund letters, conference, scoops etc

Monopolies

ErikaWittlieb / Pixabay

Given that Google is the doorway through which people enter the internet, the search engine can effectively shut out competitors by demoting them or by taking their data. Google is using its dominance in one product area-universal search—to move into other markets. Economist call this “bundling: which historically has been illegal.

Google now controls nearly 90% of search advertising, Facebook almost 80% of mobile social traffic. The two companies captured almost 90% of the digital advertising growth last year. An astonishing 45% of Americans get their news from Facebook. When you add Google, over 70% of Americans get their news from the two companies.

Google uses universal search to dominate vertical search areas like price comparisons, and it uses its browser to further dominate the ad industry. Google is a global utility in private hands. Facebook’s Community Standards project puts the company in the position of deciding arbitrarily what speech is acceptable and what is not. Network effects effectively means monopoly.

The book can help you understand how vastly the United States economy has changed over the past twenty years. If you want to invest on the side of the powerful, you seek consolidating industries, duopolies, and monopolies. However, you will also understand why inequality will keep increasing unless competition is brought back into our economy. Capitalism without competition is not capitalism. This is an important book for both investors and citizens. The authors don’t discuss other major influences on the economy like China joining the World Trade Organization or globalism, but you have a tutorial on how our economy has become hyper-concentrated.

How Big Pharma kills off competition

Are US Industries becoming More Concentrated?https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2612047


Saved Articles
X
TextTExtLInkTextTExtLInk

The Life and Career of Charlie Munger

Charlie is more than just Warren Buffett’s friend and Berkshire Hathaway’s Vice Chairman – Buffett has actually credited him with redefining how he looks at investing. Now you can learn from Charlie firsthand via this incredible ebook and over a dozen other famous investor studies by signing up below:

  • Learn from the best and forever change your investing perspective
  • One incredible tidbit of knowledge after another in the page-turning masterpiece of a book
  • Discover the secrets to Charlie’s success and how to apply it to your investing
Never Miss A Story!
Subscribe to ValueWalk Newsletter. We respect your privacy.

Congrats! Are you a smart person?

We have an exclusive targeted & limited time offer for being a sophisticated and loyal reader.

ValueWalkPremium is a website and newsletter on the latest industry news much of which is not in the public domain and obtained via our sources.

We also have 10 years of resources on how to use this information to better your investment process.

Sign up for  today and get our exclusive content for 40% off. This is our second biggest discount ever!!

Use coupon code VIP20 or click on the button below

Limited time offer only ENDS 2/29/2019 or after next 25 subscribers take advantage whichever comes first – please do not share this discount with others

 

0