73 Reds Posted January 12 Posted January 12 16 hours ago, Spekulatius said: Some moats just lose relevancy. The moat is still there but what it was supposed to defend loses relevancy. This happens with booze business. I think most example for this are in tech. The moat becomes a prison of sorts where management is damned if they break out and damned if they stay in. Examples are Motorola , Cisco, IBM and I think in the future the analog semiconductor business may end up with the same problem. Yeah, by itself a moat has little value. The real value is in the brand the moat is there to defend. You need both. As great as KO's moat may be, for decades the stock has just done OK.
Hektor Posted January 12 Posted January 12 (edited) 12 hours ago, Gregmal said: How? They have no pricing power and continue to lose customers. Right now, both of those are true. However, in my view, the story is still playing out. Further, a moat does not necessarily mean steady pricing power or growth. Every business will encounter hiccups and/or new competition. The ones with a moat will have time on hand to fix/fend off and thrive. Edited January 12 by Hektor
dwy000 Posted January 12 Posted January 12 1 hour ago, Hektor said: Right now, both of those are true. However, in my view, the story is still playing out. Further, a moat does not necessarily mean steady pricing power or growth. Every business will encounter hiccups and/or new competition. The ones with a moat will have time on hand to fix/fend off and thrive. I think its also in the margins. If you have 50% operating margins over a longer period of time you probably have a moat. Bezos' old "your margin is my opportunity".
Red Lion Posted January 12 Posted January 12 12 hours ago, Gregmal said: I would also gander Costco can raise its membership fee pretty much however much it wants to, for quite awhile. Maybe it's just me, but I've seen a significantly diminished value proposition as a customer at Costco over the last few years. This may very well just be my local warehouse. I'm beginning to question why I shop at Costco unless there's an above average chance I'm going to do a return. This has everything to do with pricing of the actual products (groceries), not the membership fee. It's gotten to the point where I'd just as soon go to Sam's club and trader joes vs. Costco.
Gregmal Posted January 12 Posted January 12 14 minutes ago, Red Lion said: Maybe it's just me, but I've seen a significantly diminished value proposition as a customer at Costco over the last few years. This may very well just be my local warehouse. I'm beginning to question why I shop at Costco unless there's an above average chance I'm going to do a return. This has everything to do with pricing of the actual products (groceries), not the membership fee. It's gotten to the point where I'd just as soon go to Sam's club and trader joes vs. Costco. Totally. When we moved from a Costco happy area to one with no Costco within two hours of either direction there was at first some panic. Today? Don’t miss it one bit.
Cod Liver Oil Posted January 12 Posted January 12 (edited) Does Nintendo have a moat? Buffett used to think Mickey Mouse was a moat for Disney. Now they are sinking a lot of capex into physical experiences. I prefer the economics of digital stuff but I am intrigued by Disney doubling down on metal bending. https://www.wsj.com/business/media/disney-cruise-rides-characters-imagineers-adventure-b5c03c1d?gaa_at=eafs&gaa_n=AWEtsqf3gsCmN9Db489T8fid_OifLwRXTopKaBuGYRDtml9TfkfMNYn8zZGC&gaa_ts=6965350e&gaa_sig=fVmHDVg8HZq7L_vVuMiKZq4XzjJHgXrKufe131ieAYcJSXrdM-gIA7o21W-_N1MNoudzztWcMe08vthCD77GAQ%3D%3D Edited January 12 by Cod Liver Oil
Rainier Posted January 12 Posted January 12 (edited) 1 hour ago, Cod Liver Oil said: Does Nintendo have a moat? Buffett used to think Mickey Mouse was a moat for Disney. Now they are sinking a lot of capex into physical experiences. https://www.wsj.com/business/media/disney-cruise-rides-characters-imagineers-adventure-b5c03c1d?gaa_at=eafs&gaa_n=AWEtsqf3gsCmN9Db489T8fid_OifLwRXTopKaBuGYRDtml9TfkfMNYn8zZGC&gaa_ts=6965350e&gaa_sig=fVmHDVg8HZq7L_vVuMiKZq4XzjJHgXrKufe131ieAYcJSXrdM-gIA7o21W-_N1MNoudzztWcMe08vthCD77GAQ%3D%3D I think the IP at Nintendo is a moat and a pretty strong one, but I kind of view entertainment IP as constantly depreciating. If you don't have consistent output of stuff that is both popular and of high quality, then I think the moat is just gradually shrinking all the time unless it's constantly bolstered. But they've been excellent caretakers of the main brands, better than almost any other entertainment company that I can think of. To the point that I think they are in a class by themselves in terms of the perfect blend of IP protection and monetization. The consistent protection of quality they've shown with Mario, Zelda, and Pokemon is almost 100% stellar. This is why I think negative or cynical viewpoints regarding the Switch 2's prospects and launch are kind of missing the point. The Switch 2 is just the vessel by which the best run entertainment company in the world pushes out its IP. The games will come and they only come on the Switch. And the thing that might get a little lost in the shuffle is that they are getting much better at this over time. Today, their more niche IP get treated extremely well (stuff like Animal Crossing, Pikmin, Metroid, Splatoon, Smash, Xenoblade, even closely aligned second party stuff like Fire Emblem). They are very good at curating this stuff and making sure that it is all extremely high quality and marketed correctly. So, 20-30 years from now, I expect all of those second tier IPs will be extremely valuable because the company isn't just putting them on the back burner like they did in the past. There are laundry lists of poorly managed video game IPs. Even within Nintendo, they haven't always done a great job. I could probably name 20 instances of very high quality games (not crappy games) that Nintendo developed and failed to turn into anything that meaningfully added to the moat. This type of high quality IP management did not happen back in the SNES, N64, GameCube eras (examples being stuff like Star Fox, Pilotwings, Wave Race, Advance Wars, Golden Sun, Earthbound, on and on). Even if you look at a second-party company like Rare (that Nintendo basically seed funded with an unlimited budget and then bought a 49% stake in). I think that the Nintendo of today would not think twice about acquiring Rare outright when the time came. That partnership had produced Golden-Eye, Killer Instinct, Donkey Kong Country, Banjo-Kazooie, Perfect Dark, Blast Corps, on and on. At the time, Rare's batting average was almost 1,000 and the games were mostly mainstream hits. Today, Nintendo acquires Monolith Soft for a niche product like the Xenoblade games and would never allow Intelligent Systems (the company that makes Fire Emblem) to be acquired by anyone else. But the Nintendo of 25 years ago allows itself to get into a situation where Rare goes out for bid and then they lose Rare to Microsoft. I'm sure there was some type of calculus that went into that decision, but in retrospect it seems absolutely ridiculous that Rare was bought by Microsoft instead of Nintendo, especially given the fact that alot of the IP basically died on the vine at Microsoft for a lot of different reasons. And it is more ridiculous after Nintendo had just made a calculated decision to spurn a perpetually popular second party developer (SquareSoft with Final Fantasy and Chrono Trigger) because Nintendo wanted to stick to cartridge based consoles versus moving to CD based media (the irony is that the cart vs CD decision was made in part because of Rare and their commitment to Silicon Graphics style graphics production). And all of that bad judgment led to Nintendo losing Square to Sony exclusivity (which immediately resulted in the release of two Final Fantasy games that were uber massive hits and helped solidify the Playstation's #1 position in that and future eras) and Rare to Microsoft. Just epically stupid on all fronts on the part of Nintendo. I have no inside information, but I get the sense that that era of Nintendo's history (after the massive success of the SNES and going into the N64/GameCube) bred a lot of hubris and resulted in some bloat in the management team - specifically with Nintendo of America getting an outsized share of influence over the high level decisions of the company. Iwata taking over and his extremely game-quality focused mentality (he was the CEO/president of the company from 2002 until he died in 2015) was really critical for the company and I don't think you have the current setup without his leadership (which I am personally very optimistic about from an investment standpoint). Rant over, but my point is that today's Nintendo seems almost fanatical about protecting and nurturing their IP (at least to a much greater extent than companies like Disney or Warner or Microsoft). Edited January 12 by Rainier
Spekulatius Posted January 12 Posted January 12 14 hours ago, Gregmal said: I would also gander Costco can raise its membership fee pretty much however much it wants to, for quite awhile. I don’t think so. If they increase the membership feee too much , the marginal user will drop their membership . They also will have trouble signing up new users (young families etc.) which means their funnel dies. There is pricing power there, but they have to be smart on how to use it. The smart way to increase pricing is to increase the perceived value of the goods and devices provided.
villainx Posted January 12 Posted January 12 I still adore Costco. If the majority of my fam weren't vegetarians, I'd shop a little more frequently.
KPO Posted January 12 Posted January 12 Typically monopolies or duopoly’s fit the bill, so I’d suggest BA & Airbus. It would take over a decade to replicate either one of their heavily regulated designs, as well as their manufacturing scale. Neither is particularly cheap currently, and that’s the trick…..finding companies with a moat at a reasonable price.
Marco Van Basten Posted January 13 Posted January 13 5 hours ago, KPO said: Typically monopolies or duopoly’s fit the bill, so I’d suggest BA & Airbus. It would take over a decade to replicate either one of their heavily regulated designs, as well as their manufacturing scale. Neither is particularly cheap currently, and that’s the trick…..finding companies with a moat at a reasonable price. I disagree that Airbus is expensive. I happen to own it and GE & Safran, and I would buy both with a clean sheet.
KPO Posted January 13 Posted January 13 48 minutes ago, Marco Van Basten said: I disagree that Airbus is expensive. I happen to own it and GE & Safran, and I would buy both with a clean sheet. To my message, do you think Airbus is “particularly cheap” currently? It literally hit an all time high today and is at the highest valuation on every metric than it’s been in years. What metrics are you looking at and what growth rate are you expecting that make you excited here? To the point of the thread I assume you’re in agreement it has a decent moat?
Marco Van Basten Posted January 13 Posted January 13 4 minutes ago, KPO said: To my message, do you think Airbus is “particularly cheap” currently? It literally hit an all time high today and is at the highest valuation on every metric than it’s been in years. What metrics are you looking at and what growth rate are you expecting that make you excited here? To the point of the thread I assume you’re in agreement it has a decent moat? Yes, I agree with you that Airbus has a decent moat. I am assuming that over the next 40-50 years, the number of miles flown will grow by 3-4% per annum, Airbus and Boeing will largely maintain their duopoly, neither Embraer nor Comac will become material threats, and operating margins (EBIT) will reach 20%.
ourkid8 Posted January 13 Posted January 13 On 1/11/2026 at 12:05 PM, Gregmal said: St Joe. On 1/11/2026 at 12:35 PM, Malmqky said: Railroads come to mind. 100% - rails have one of the strongest moats along with pricing power which they have the ability to price over inflation. St Joe, what can we say they are building MPCs - not a lot of competition!
WFF Posted January 13 Posted January 13 19 hours ago, Cod Liver Oil said: Does Nintendo have a moat? Buffett used to think Mickey Mouse was a moat for Disney. Now they are sinking a lot of capex into physical experiences. I prefer the economics of digital stuff but I am intrigued by Disney doubling down on metal bending. https://www.wsj.com/business/media/disney-cruise-rides-characters-imagineers-adventure-b5c03c1d?gaa_at=eafs&gaa_n=AWEtsqf3gsCmN9Db489T8fid_OifLwRXTopKaBuGYRDtml9TfkfMNYn8zZGC&gaa_ts=6965350e&gaa_sig=fVmHDVg8HZq7L_vVuMiKZq4XzjJHgXrKufe131ieAYcJSXrdM-gIA7o21W-_N1MNoudzztWcMe08vthCD77GAQ%3D%3D Disney’s moat has narrow, the younger folks seems to love Harry Potter, Minions etc more. The teens/college kids I know, when I have them choose going to Disney or Universal most pick Universal. Same for Nintendo, it still has a strong franchise, but the love for Mario, Zelda etc is probably not as strong as it was for people born in the 80s. The younger generations seems to have a bigger love for Pokémon. This doesn’t mean Nintendo wouldn’t pull a Disney and buy IPs from Stan Lee. On to moat, the closest I think to Coca Cola is Maotai (though that would require you to be comfortable with China).
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