saltybit Posted May 17, 2014 Share Posted May 17, 2014 Warren Buffett famously said the following about Coke: If you gave me $100 Billion and said, ‘Take away the soft-drink leadership of Coca-Cola in the world’, I’d give it back to you and say it can’t be done”. Which companies can you say this about right now? (ie. if you gave $X billion dollars to the second place company, it still will have a hell of a time to take leadership away from the first) Link to comment Share on other sites More sharing options...
argonaut Posted May 17, 2014 Share Posted May 17, 2014 Microsoft? Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted May 17, 2014 Share Posted May 17, 2014 Visa probably has a stronger moat than Coke. Fannie/Freddie used to have a good moat, but management screwed that up. Link to comment Share on other sites More sharing options...
ourkid8 Posted May 17, 2014 Share Posted May 17, 2014 Marlboro is the only true global cigarette brand. tks, S Link to comment Share on other sites More sharing options...
no_free_lunch Posted May 18, 2014 Share Posted May 18, 2014 Microsoft? +1 That is probably the strongest moat I have ever seen. I would say that facebook's is incredibly strong as well. Even google couldn't touch it. Not sure if it's $100B strong, but close enough. Link to comment Share on other sites More sharing options...
tradevestor Posted May 18, 2014 Share Posted May 18, 2014 "Google has a huge new moat," Munger said. "In fact I've probably never seen such a wide moat." http://www.marketwatch.com/story/buffett-munger-praise-googles-moat Link to comment Share on other sites More sharing options...
Rainforesthiker Posted May 18, 2014 Share Posted May 18, 2014 I think Disney has one of the strongest moats. The way they they tie and cross-sell movies and theme parks, each leveraging the other, is very powerful. Universal is a distant second. Disney has moats on multiple levels - Classic Disney, Pixar, Marvel, ESPN, LucasFilm. Disney's films and characters are embedded in people's consciousness around the world. I don't think it can be duplicated, or at the least it would take decades to do so. Link to comment Share on other sites More sharing options...
Palantir Posted May 18, 2014 Share Posted May 18, 2014 Google has a huge moat, Microsoft struggled to break it with Bing. Facebook has a moat, Google couldn't break it with Google+. There are lots of firms with moats, not sure it is all that big of a deal really. Personally, I think "moat" gets thrown around way too much. Link to comment Share on other sites More sharing options...
saltybit Posted May 18, 2014 Author Share Posted May 18, 2014 Visa probably has a stronger moat than Coke. Fannie/Freddie used to have a good moat, but management screwed that up. I was thinking if one of the big tech companies (Amazon/Google/Facebook) wants to get into the payments business. They can acquire one of the payment/card networks and will mount a fairly serious challenge to the rest of the industry. (they have more product/technical skills to come up with new ways of payments or adding functionality on top of the existing payments network) Having purchase data (even if anonymized or on an aggregate level) can also help their existing businesses, especially for advertising. Link to comment Share on other sites More sharing options...
jschembs Posted May 18, 2014 Share Posted May 18, 2014 How about AWAY (owns Homeaway and VRBO)? VRBO has almost become a verb for folks looking for vacation homes. I know Airbnb is getting all the press these days, but I think AWAY has carved out a pretty defensible niche. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted May 18, 2014 Share Posted May 18, 2014 Visa probably has a stronger moat than Coke. Fannie/Freddie used to have a good moat, but management screwed that up. I was thinking if one of the big tech companies (Amazon/Google/Facebook) wants to get into the payments business. They can acquire one of the payment/card networks and will mount a fairly serious challenge to the rest of the industry. (they have more product/technical skills to come up with new ways of payments or adding functionality on top of the existing payments network) Having purchase data (even if anonymized or on an aggregate level) can also help their existing businesses, especially for advertising. Both Amazon and Google got into the payments business. Google Checkout gained pretty good market share. Then they exited the business!! My guess is that they were getting killed by fraud. Or look at Square... very popular, users love them... bleeding money. I suspect that Amazon might also be losing money. It's hard to tell because Amazon doesn't break it out. But it is very easy to lose money in the payments space. The barrier to entry is fraud. The survivors are the ones who didn't get killed by it (e.g. Paypal, Visa, Mastercard, Amex). Link to comment Share on other sites More sharing options...
gary17 Posted May 18, 2014 Share Posted May 18, 2014 starbucks boeing US military education from ivy league schools such as Harvard & MIT Link to comment Share on other sites More sharing options...
saltybit Posted May 18, 2014 Author Share Posted May 18, 2014 Visa probably has a stronger moat than Coke. Fannie/Freddie used to have a good moat, but management screwed that up. I was thinking if one of the big tech companies (Amazon/Google/Facebook) wants to get into the payments business. They can acquire one of the payment/card networks and will mount a fairly serious challenge to the rest of the industry. (they have more product/technical skills to come up with new ways of payments or adding functionality on top of the existing payments network) Having purchase data (even if anonymized or on an aggregate level) can also help their existing businesses, especially for advertising. Both Amazon and Google got into the payments business. Google Checkout gained pretty good market share. Then they exited the business!! My guess is that they were getting killed by fraud. Or look at Square... very popular, users love them... bleeding money. I suspect that Amazon might also be losing money. It's hard to tell because Amazon doesn't break it out. But it is very easy to lose money in the payments space. The barrier to entry is fraud. The survivors are the ones who didn't get killed by it (e.g. Paypal, Visa, Mastercard, Amex). Yes, payments is hard, and these companies have failed trying to enter before. What I meant though was what if say, Google decided to acquire Discover, or Mastercard? I think they have enough cash and access to financing if they want to do it. Link to comment Share on other sites More sharing options...
writser Posted May 18, 2014 Share Posted May 18, 2014 I think the companies with the biggest moats are the ones that have been granted access to limited resources. Saudi Aramco, Gazprom & Statoil come to mind. Impossible to replicate. Also the Channel Tunnel, BNSF and other railway companies: no way you are allowed to add more tracks in in urban areas / under the sea. In terms of sticky products I think Microsoft has one of the biggest moats. So many people and companies depend on Outlook, Word, Excel, Visual Studio and Powerpoint that it will take decades to undermine their position. Airbus & Boeing probably have a large moat too - their technical knowledge and safety records are very hard to replicate. Link to comment Share on other sites More sharing options...
augustabound Posted May 18, 2014 Share Posted May 18, 2014 I think Disney has one of the strongest moats. Having 2 daughters aged 2 and 5, Disney goes in the Coke/Visa category for me also. Without even knowing or realizing it was happening, our 2 are obsessed with Disney Princesses, Minnie Mouse and our 5 year old has been asking about going to Disney for a while. Don't get me wrong, we think it's great. Every kid needs Disney.............it just happened so fast. ;D Link to comment Share on other sites More sharing options...
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