Network Effect is one of the seven moats of quality companies. Platforms—Facebook, Netflix, Uber, Spotify, Tencent, Meituan-Dianping, etc—have come to dominate the economy and the stock market over the past decade. Most of these platforms garner a rich market valuation because they possess a moat called the network effect. And as the digital economy pie […]
I have always interested to find out what makes a company tick. Why some companies succeed while others fail? What enables a company to grow continuously for decades when others fail to maintain that even for a few years. Is it management? The nature of the industry? The products a company offers? Or is it […]
Peter Thiel is a co-founder of PayPal and Palantir Technologies, which specialized in big data analytics. While it is more apt to call him a tech entrepreneur than an investor, he knows something about moats and good thinking. Peter Thiel explains the differences between perfect competition and monopoly: “Every firm in a competitive market is […]
Why is the reason that some companies can grow their business at a high return for decades while others failed to do so or falter after a few years of outstanding growth? What separates them? Is it because of the management? Or is it something else? More importantly, what is the commonalities amongst these high […]
Background Malaysia’s cement industry is getting hit hard over the past few years. Lafarge, the biggest cement player in Malaysia is down close to 50% from its peak $10 in 2015. The 4 key factors currently affecting the cement industry are: Industry headwinds Higher cost Overcapacity Soft property market Slow rollout of infrastructure projects Higher […]
Previously, I talk about the concept margin of safety and how various domains from military, engineering and investing apply the same principle because there are many unexpected things that can happen in life, albeit in different terms. Having a ‘just in case’ plan reduces the probability of unfavorable outcomes. And investing is all about protecting […]