Anyone here really pay attention to economic moats?

And how do you determine if there is a moat and its probable life span? Commodore was the first company to ship one million home computers and was touted for the width and depth of its barriers to entry from small fry companies like Microsoft and Apple. Similar examples can be pulled from any industry. Berkshire for example lost its moat about 1998 when private equity firms and pension funds saw their metrics and started to compete with it. Risk adjusted returns on Berkshire with its @ 30% leverage has been reverting to the mean with a vengeance since at least the 1998 purchase of Munich Re.
 
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And how do you determine if there is a moat and its probable life span? Commodore was the first company to ship one million home computers and was touted for the width and depth of its barriers to entry from small fry companies like Microsoft and Apple. Similar examples can be pulled from any industry. Berkshire for example lost its moat about 1998 when private equity firms and pension funds saw their metrics and started to compete with it. Risk adjusted returns on Berkshire with its @ 30% leverage has been reverting to the mean with a vengeance since at least the 1998 purchase of Munich Re.

How many hedge funds are actually profitable? 10%?
 
I haven't check lately, but that sounds right. I haven't check the record of private equity funds, but the smaller ones tended to do better than the large ones a few years ago, so I wondered if they went the way of hedge funds. I know Romney's made a huge amount of money, but at one point some 50% of the companies went bankrupt, like Mervyn's, while still making a lot of money for the Fund. I liked Mervyn's, and was pissed when Romney bankrupted it and pocketed many millions off of it. The bigger Funds were cannibals, the smaller funds had better records of actually turning companies around and improving them.
 
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And how do you determine if there is a moat and its probable life span? Commodore was the first company to ship one million home computers and was touted for the width and depth of its barriers to entry from small fry companies like Microsoft and Apple. Similar examples can be pulled from any industry. Berkshire for example lost its moat about 1998 when private equity firms and pension funds saw their metrics and started to compete with it. Risk adjusted returns on Berkshire with its @ 30% leverage has been reverting to the mean with a vengeance since at least the 1998 purchase of Munich Re.

Berkshire Hathaway? It has a wide economic moat.

Apple has a narrow economic moat, but far greater than what Commodore was ever able to achieve.

How do you determine if there's a moat? Watch the longer talk given by Pat Dorsey that I posted earlier.
 
Re Apple what's the difference between a new buzz word like 'moat' and a large patent pool and a huge cash reserve to keep smaller companies from competing through constant frivolous lawsuit harassment? Is 'moat' a euphemism for 'sleazy low life business practices'?
 
Re Apple what's the difference between a new buzz word like 'moat' and a large patent pool and a huge cash reserve to keep smaller companies from competing through constant frivolous lawsuit harassment? Is 'moat' a euphemism for 'sleazy low life business practices'?

Haha...Their moat, which is narrow and not insurmountable, mostly comes from their mild trap-door effect in terms of customer switching costs. Apple and their various products have become a part of many people's lives, think iCloud, iTunes, iMessage, Facetime, even the iPhone itself which still causes people to go crazy for.

Their various hardware and software patents also contribute to their moat. Patents are a big intangible asset. And yes, you're right, as soon as anyone even tries to copy anything that they've patented, Apple slams them. But then again, that's what patents are for. They're designed to protect a company's products.

They also have some network effect advantages from Apple Pay, iMessage and Facetime. No other tech company that sells electronic devices has been able to achieve anything remotely close to what Apple has.
 
Re Apple what's the difference between a new buzz word like 'moat' and a large patent pool and a huge cash reserve to keep smaller companies from competing through constant frivolous lawsuit harassment? Is 'moat' a euphemism for 'sleazy low life business practices'?

Haha...Their moat, which is narrow and not insurmountable, mostly comes from their mild trap-door effect in terms of customer switching costs. Apple and their various products have become a part of many people's lives, think iCloud, iTunes, iMessage, Facetime, even the iPhone itself which still causes people to go crazy for.

Their various hardware and software patents also contribute to their moat. Patents are a big intangible asset. And yes, you're right, as soon as anyone even tries to copy anything that they've patented, Apple slams them. But then again, that's what patents are for. They're designed to protect a company's products.

They also have some network effect advantages from Apple Pay, iMessage and Facetime. No other tech company that sells electronic devices has been able to achieve anything remotely close to what Apple has.

Mostly agree, except Apple, Microsoft, Intel, harass small companies who aren't copying anything from them, they're just harassing them to keep them from developing and bringing competitive products to market, as well as hoping to force these smaller companies to sell their patents to them from pennies; that's been the reasons they got so big and remain there in the first place; they've developed few innovations themselves. Google is doing the same, though I don't know if they're quite the pirates Apple, MS,and Intel are; maybe they are, maybe not, I haven't looked into them. Same with drug companies and other industries too,
 
Outside of the US Apple generally loses patent battles with Samsung. India, China, Japan and the EU are gunning for them on anti-trust issues and google and Facebook too. Intel has basically had its head handed to them by ARM and Microsoft revenues are looking poor compared to its glory days. Me, I'm getting ready to sell Sept calls on what I own and Nov puts on my watch list, as of when I finish doing that I will ignore the market until Nov.
 
Re Apple what's the difference between a new buzz word like 'moat' and a large patent pool and a huge cash reserve to keep smaller companies from competing through constant frivolous lawsuit harassment? Is 'moat' a euphemism for 'sleazy low life business practices'?

Haha...Their moat, which is narrow and not insurmountable, mostly comes from their mild trap-door effect in terms of customer switching costs. Apple and their various products have become a part of many people's lives, think iCloud, iTunes, iMessage, Facetime, even the iPhone itself which still causes people to go crazy for.

Their various hardware and software patents also contribute to their moat. Patents are a big intangible asset. And yes, you're right, as soon as anyone even tries to copy anything that they've patented, Apple slams them. But then again, that's what patents are for. They're designed to protect a company's products.

They also have some network effect advantages from Apple Pay, iMessage and Facetime. No other tech company that sells electronic devices has been able to achieve anything remotely close to what Apple has.

Mostly agree, except Apple, Microsoft, Intel, harass small companies who aren't copying anything from them, they're just harassing them to keep them from developing and bringing competitive products to market, as well as hoping to force these smaller companies to sell their patents to them from pennies; that's been the reasons they got so big and remain there in the first place; they've developed few innovations themselves. Google is doing the same, though I don't know if they're quite the pirates Apple, MS,and Intel are; maybe they are, maybe not, I haven't looked into them. Same with drug companies and other industries too,

Yeah, the tech world is fucking dirty. Really cutthroat.
 

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