# Which companies have grown so big / strong / unique that it created its own niche?



## internalaudit (Jan 27, 2017)

Just like one of the threads started recently, it seems FaceBook and Amazon can be considered as two of these companies with huge economic moats around them and that's almost made itself untouchable. 

Any other companies you can think of and why?

Thanks, as always.


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## m3s (Apr 3, 2010)

Neither are untouchable

Facebook already isn't 'cool' for youngins anymore. What teen wants their life broadcast to their parents and grandparents? Far less people are posting anything personal on Facebook anymore in my experience. It's all reposts of fake news and 4chan memes

I use amazon almost weekly. It has replaced most of my necessary mundane shopping at Crappy Tire, Walmart, Rona, Shoppers etc. However if something better came along tomorrow I would switch in a heartbeat for any fickle reason. I have no commitment to amazon

Big this decade, maybe gone the next


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## james4beach (Nov 15, 2012)

Facebook and Apple are fads.

Already, Facebook has fallen out of fashion among younger people. Apple has had remarkably long fashion status but these things don't last forever. There is nothing fundamentally nothing novel about what any of these tech companies do.

Amazon isn't special either. Other retailers like Alibaba have been just as successful in their own markets, and there's not much to stop one of them from operating in North America.


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## internalaudit (Jan 27, 2017)

Thanks both for the comments. 

Good point on Facebook. I really haven't bought anything but have accidentally clicked on ads while on mobile.

For Alibaba, it will not have the Chinese labor cost advantage if it sets up shop in the United States so not sure if there is such a thing as a first mover advantage where some company like Amazon becomes entrenched.


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## sags (May 15, 2010)

Berkshire Hathaway of course, with Buffet the "king of moats".

I don't think there are too many companies around that compare with their size, diversity, and steady revenue growth.

Not paying dividends, but using the revenue to purchase money producing assets has been a brilliant strategy by Buffet.

BRK is a money printing machine that gets bigger with every acquisition.

Lately..........the 4th quarter of 2016, Buffet moved some money around. Posted on February 14, 2017 on a Berkshire blog.

_In an SEC 13F filing after the market closed today, Berkshire Hathaway reported that it substantially added to its stakes in airlines (American Airlines, Delta Airlines, Southwest Airlines, and United Continental) and Apple, took new positions in Monsanto and Sirius XM Holdings, and sold Deere and Kinder Morgan, and almost all of its stakes in Verizon, and Wal-Mart during the fourth quarter of 2016._

Buffet likes the airlines apparently and interesting that he dumped Deere, Kinder Morgan, Verizon and Walmart.

Buffet doesn't like tech stocks much but he lets his underlings dip in a little, and the BRK fund earned $358 million on their Apple shares.


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## internalaudit (Jan 27, 2017)

Good point about BRK.


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## Kropew (Nov 24, 2013)

CNR

ENB


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## internalaudit (Jan 27, 2017)

Thanks Kropew. Makes perfect sense for some utilities.


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## My Own Advisor (Sep 24, 2012)

james4beach said:


> Facebook and Apple are fads.
> 
> Already, Facebook has fallen out of fashion among younger people. Apple has had remarkably long fashion status but these things don't last forever. There is nothing fundamentally nothing novel about what any of these tech companies do.
> 
> Amazon isn't special either. Other retailers like Alibaba have been just as successful in their own markets, and there's not much to stop one of them from operating in North America.


I'm with James on this. Good and profitable now but someone will eat their lunch in a few years. You don't need Facebook or Apple.


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## Eder (Feb 16, 2011)

Best moat in the world is real estate/right of ways such as railroads , pipelines , and other utilities enjoy. Bulletproof.


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## jargey3000 (Jan 25, 2011)

whether you like them or not: Wal-Mart, Costco and McDonalds


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## Rusty O'Toole (Feb 1, 2012)

There was a time when General Motors was such an unassailable giant. They were the biggest richest company in the world, sold half the cars made in the US, were so big and so powerful nobody thought they would ever be challenged.

Nothing lasts forever.


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## bflannel (Apr 21, 2013)

Very interesting replys! I think we're straying from the question's essence however. Canada's big banks are so big/ strong/ unique that they've created their own niche in a massive shared market.

or

I think when you look at the history of a company such as Netflix you can see how the business model they were using grew from sendng DVD's in the mail to disrupt the competition, and then completely digital and developed relative to their market peers. I can see Uber's long term interest in fully autonomous cab fare, things that make a company the first... even just for a while. Nothing lasts forever but for many while they do exist in their supremacy they meet the original posts criteria.


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## internalaudit (Jan 27, 2017)

What about ownership of critical patents? If GM was a behemoth but it didn't have enough patents to dissuade new entrants, then of course, it isn't infallible.


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## james4beach (Nov 15, 2012)

bflannel said:


> Canada's big banks are so big/ strong/ unique that they've created their own niche in a massive shared market.


No they're not. They're just highly leveraged into a North American economic rebound, plus very high exposure to the red hot Canadian housing market. A bank would have to be a total failure to not do well in that environment.

High performance is not the same as strength. These are global banks, exposed to credit markets, and extremely exposed to housing. If global credit slows, and/or Canadian housing falls, they will tumble.


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## james4beach (Nov 15, 2012)

And proof of my claim that there's nothing unique about the Canadian banks: here are charts of the Canadian banks (XFN) over top the US banks (XLF)
http://stockcharts.com/h-sc/ui?s=XLF&p=D&yr=4&mn=0&dy=0&id=p51462714251

If Canadians banks are so unique, then why are they doing exactly the same thing as US bank stocks? The movements of all these banks are remarkably similar. Don't read too much into this, it's really not about the specific businesses.


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## My Own Advisor (Sep 24, 2012)

I would go with railroads and pipelines and telcos and major utilities. So in Canada, namely good moats or long-term takeovers amongst them:

CNR + CP
ENB + TRP + IPL + PPL
BCE + T + RCI.B
FTS + EMA

Canadian banks (big-7) have good moats as well and thank goodness most of the big ones have diversified outside of Canada in recent years.


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## Pluto (Sep 12, 2013)

james4beach said:


> And proof of my claim that there's nothing unique about the Canadian banks: here are charts of the Canadian banks (XFN) over top the US banks (XLF)
> http://stockcharts.com/h-sc/ui?s=XLF&p=D&yr=4&mn=0&dy=0&id=p51462714251
> 
> If Canadians banks are so unique, then why are they doing exactly the same thing as US bank stocks? The movements of all these banks are remarkably similar. Don't read too much into this, it's really not about the specific businesses.


Be nice if you could offer a longer chart. I think you will find that in the last 10 years the (five) Canadian banks have all outperformed xlf, not including dividends. Reportedly, over the last 25 years the Canadian big banks have outperformed BRK. 

Yes, banks have exposure, like all companies, to their economic circumstances. All companies tumble from time to time. some never recover, but the main banks always have. tumbles by our banks are buying opportunites. similarily with piplines and telecoms.


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## internalaudit (Jan 27, 2017)

My Own Advisor said:


> I would go with railroads and pipelines and telcos and major utilities. So in Canada, namely good moats or long-term takeovers amongst them:
> 
> CNR + CP
> ENB + TRP + IPL + PPL
> ...


Thanks, sounds like unless we live in a virtual world or stop using commodities, railroads and pipelines will not cease to exist.


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## zylon (Oct 27, 2010)

*Brookfield BAM.A-ca BAM-us*

The sector and geographical diversification is very impressive.
It's almost like owning a global ETF without the fee;
although getting rid of the periodic spinoffs can be a pita!



> *Our History*
> We got our start over a century ago, helping to launch Brazil’s first electrical and transport utility in 1899 and listing it on the Toronto Stock Exchange in 1912. Since then, we have been directing capital toward real estate, renewable power and infrastructure assets that provide the foundation for economic pursuits around the globe.


Interesting history slideshow here:
https://www.brookfield.com/en/Our-Firm/About-Us

But always remember - any stock can go to zero.
2007 to 2009 BAM.A dropped about 70%



free photo upload


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