over 2 years ago

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    Identify Top Tier Stocks

    “ A Moat is a business's ability to maintain competitive advantages over its competitors in order to protect its long-term profits and market share from competing firms.” - Warren Buffet

    M.O.A.T | Competitive Advantage

    M | etcalf's Law 

    Has a strong brand/identity that creates demand for the product through network adoption. The value of a network =  (UxU) or the number of users multiplied by itself. If you have 1000 users the value of the network is 1000 x 1000 = $1,000,000.

    Facebook’s network effect grew users at an exponential rate.

    Looking deeper into Facebook & Metcalfs Law (video)​

    O | ngoing Research & Development

    Spends time and resources on Research and Development to form unique intangible assets. This includes making precipitous steps towards innovation.

    Tesla spends around three times more on Research and Development than its competitors. Tesla's innovation is changing the future of transportation and energy.

    The dominant companies in their industries are consistently the highest spenders in R&D: Amazon, Google, Apple, Microsoft & Facebook.Look deeper into Tesla's R&D (video)

    A | ctive Monopoly 

    The ability to possess & supply huge amounts of products cheaper than competitors.

    Google deploys unique services that collect more data on users than any other company on earth, giving them a unique competitive advantage. Google controls most of the supply of data through Youtube, Google Maps, Google search engine, and Google images.

    Look deeper into Googles Monopoly (video)

    T | actical Margins

    The ability to increase profits at a faster rate than costs and expenses over a sustainable period of time. This includes evidence of financial performance (income statement + cash flow statement) and financial health (balance sheet).

    Apple’s product & service performance, brand strength, and marketing execution generate massive cash-flows for long-term growth, risk stability, and industry expansion.

    Apple products dominate the consumer electronics industry by growing new revenue streams in both products and services.

    How Apple generates superior Margins (video)

    Concept Review

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