Use access key #2 to skip to page content.

JohnCLeven (75.89)

Let's Play a Game!

Recs

17

June 26, 2013 – Comments (19)

This game is about which companies YOU think are LEAST likely to have their competitive advantage eroded over the next 20 years.

The game begins with this list of 10 companies. (Note these numbers are NOT rankings, they are only numbered to make sure we actually have a list of 10)

1.BRK.A

2.KO

3.MCD

4.V

5.PM

6.DEO

7.NOV

8.UPS

9.SYY

10.JNJ

Now, here's how the game works.

First you pick the company on the list of 10 that you think is MOST likely to have its competitive advantage weakened over the next 20 years.

Then you REPLACE that company with whatever company, that is not already on the list, that you think has the LEAST likelihood of losing its competitive advantage.

Please give detailed reasoning for both the replaced pick, and the new pick.

I'll go first as an example:

I think PM has the highest probability of losing its competitive advantage/moat due to the risk of unfavorable international legislation, and the risk of being taxed into oblivion.

I will replace PM with CSX, because I believe it's basically impossible to replicate the assets of a Class I railroad in modern times. I believe that CSX's duopoly with NSC will endure for many decades to come.

The new list is:

1.BRK.A

2.KO

3.MCD

4.V

5.CSX

6.DEO

7.NOV

8.UPS

9.SYY

10.JNJ

Please note: If a company is replaced (like I just replaced PM) it can still be picked up by later players, and is certainly not eliminated from the game.

I think, if we get some decent participation in this game, it could be a lot of fun. And we might learn a little bit about long term competitive advantages.

Hopefully this makes sense. Let me know if you have questions.

Well, now it's your turn! GAME ON!

19 Comments – Post Your Own

#1) On June 26, 2013 at 1:26 PM, Mega (99.95) wrote:

I choose Sysco as the weakest of those, because I think their main advantage is scale while most of the others have scale plus powerful brands. I think scale is becoming more vulnerable, with new technology (for example cloud computing) letting small companies compete more effectively with large companies.

I can't decide on a replacement so I'll leave that to the next commenter.

1.BRK.A
2.KO
3.MCD
4.V
5.CSX
6.DEO
7.NOV
8.UPS
9.???
10.JNJ

Report this comment
#2) On June 26, 2013 at 3:00 PM, JohnCLeven (75.89) wrote:

Since we have an open spot, the next contender can fill the open spot AND then take a regular turn.

 

Report this comment
#3) On June 26, 2013 at 5:35 PM, miteycasey (30.30) wrote:

1.BRK.A
2.KO
3.MCD
4.V
5.CSX
6.DEO
7.TM
8.UPS
9.APPL
10.JNJ

Report this comment
#4) On June 26, 2013 at 7:37 PM, HarryCarysGhost (99.70) wrote:

Taking out Deo, just because margins in the booze industry are razor thin, and competition is fierce. (Says the man enjoying an ice cold Budweiser)

Hope we don't have to be diversified since I'm adding Google... (it's a verb for crying out loud ;)

1.BRK.A
2.KO
3.MCD
4.V
5.CSX
6.GOOG
7.TM
8.UPS
9.APPL
10.JNJ

 

Report this comment
#5) On June 26, 2013 at 10:22 PM, tdonb (43.46) wrote:

I am taking out V because I believe the near field communications or some other technology will make payments from credit cards as irrelevant as using cash is today.  

Adding Disney since they purchase everything relevant to children (Pixar, Marvel, etc.).

1.BRK.A
2.KO
3.MCD
4.DIS
5.CSX
6.GOOG
7.TM
8.UPS
9.APPL
10.JNJ

Report this comment
#6) On June 27, 2013 at 8:28 AM, ElCid16 (96.11) wrote:

BRK almost isn't fair.  :)

I think AMZN, WFM, SBUX, would be in this list before TM and AAPL. (not sure what APPL is...?)

Good post. 

Report this comment
#7) On June 27, 2013 at 1:14 PM, Mega (99.95) wrote:

I agree with ElCid. There's a huge competitive distance between Amazon and their second-rate competitors, compared with a very small difference between Toyota and other world-class car manufacturers.

On the other hand I don't think AMZN is a good investment at the current price.

1.BRK.A
2.KO
3.MCD
4.DIS
5.CSX
6.GOOG
7.AMZN
8.UPS
9.AAPL
10.JNJ

Report this comment
#8) On June 27, 2013 at 1:52 PM, JohnCLeven (75.89) wrote:

I'm really digging the answers so far guys, as well as the way this list is evolving!

Keep it going!

Report this comment
#9) On June 27, 2013 at 2:23 PM, ElCid16 (96.11) wrote:

Alright, I'll take out AAPL for WFM.  Whole Foods has twice the operating margins of any other large-scale US grocer.  

As Megashort noted, I'm not sure WFM is a great buy at its current price, but we're just talking about competitive advantage here. 

1.BRK.A
2.KO
3.MCD
4.DIS
5.CSX
6.GOOG
7.AMZN
8.UPS
9.WFM
10.JNJ

 

Report this comment
#10) On June 27, 2013 at 7:38 PM, rd80 (98.27) wrote:

1.MKC
2.KO
3.MCD
4.DIS
5.CSX
6.GOOG
7.AMZN
8.UPS
9.WFM
10.JNJ

I'll take BRK-A off the list because twenty years is a long time and it's likely a good portion of the two decades will be without Warren Buffett at the helm.

Replacing it with McCormick.  Reasoning - quick, name the number two spice company.  I don't know it either.  Slow steady growth, expanding outside the US, been growing the dividend for a long time.  Lots to like, but it is a bit pricey.

Disclosure:  Long MKC.

Report this comment
#11) On June 27, 2013 at 10:02 PM, HarryCarysGhost (99.70) wrote:

No changes to rank offered, just wan't to chime in to this statement-

I am taking out V because I believe the near field communications or some other technology will make payments from credit cards as irrelevant as using cash is today. 

Visa and MasterCard have been the leaders of NFC , basically you'll be swiping your phone...Bam!!! transaction fee.

Disclosure- Long V.

 

Report this comment
#12) On June 28, 2013 at 1:18 AM, valuemoney (99.99) wrote:

1.MKC
2.KO
3.MCD
4.DIS
5.CSX
6.HSY
7.AMZN
8.UPS
9.WFM
10.JNJ

If the name didn't deserve a spot twenty 20 years ago it shouldn't be on here now in my own humble opinion. HSY has a track record similar to KO. PEP deserves a spot on here also. KO's twin. Sorry to see PM go. Obv. you are not a smoker JohnCLeven. Hehe. I smoke and can't quit. No one will outlaw smoking. Same with drinking. They tried alcohol once and that didn't go over so well. Awesome blog. I do the same with my top ten. They are names with the biggest moats that I would invest a huge portion of my money with if they get cheap enough.

Report this comment
#13) On June 28, 2013 at 1:48 AM, valuemoney (99.99) wrote:

O, If anyone wants to take HSY off the list I think it they should keep in mind HSY AVERAGE ROE the last ten years has been 58.74%. I think they might have a hard time finding a better ROE. Mars would be similar I would think but they are a private company. Why such a high ROE? Their moat is second to none. HSY never gets cheap for a reason.

Report this comment
#14) On June 28, 2013 at 2:39 AM, valuemoney (99.99) wrote:

http://www.wikinvest.com/wiki/Hsy

good site to see if there is a moat....type any name you like....CPB or MO are other companies with massive moats.....sorry for the multiple comments....you said you wanted reasoning.... and thought I would add a site to look at.......did I say good post? :)

Report this comment
#15) On June 28, 2013 at 2:50 AM, valuemoney (99.99) wrote:

And if WMT don't get on this list instead of AMZN there is something wrong..... http://www.wikinvest.com/stock/Wal-Mart_(WMT)   .......If you care to know what a moat is. Ok sorry I will quit.

Report this comment
#16) On June 28, 2013 at 10:31 AM, ElCid16 (96.11) wrote:

Comment 12, 13, 14, 15.

http://i1.kym-cdn.com/photos/images/newsfeed/000/353/279/e31.jpg

:)

Report this comment
#17) On June 28, 2013 at 1:31 PM, Mega (99.95) wrote:

Did CAPS eat my comment? That's annoying.

Report this comment
#18) On June 28, 2013 at 3:38 PM, tdonb (43.46) wrote:

#11 HCG - Interesting. I didn't know that. 

Report this comment
#19) On July 02, 2013 at 11:03 PM, HarryCarysGhost (99.70) wrote:

This may not be a popular pick, but adding XOM.

Leader in the energy field, and will adapt to whatever changes may occur over time.

Dropping WFM, Just because people can't afford to shop there. Spending all that money on gas and all... 

1.MKC
2.KO
3.MCD
4.DIS
5.CSX
6.HSY
7.AMZN
8.UPS
9.XOM
10.JNJ

Report this comment

Featured Broker Partners


Advertisement