432- Perfect Competition

InvestED: The Rule #1 Investing Podcast

Phil Town & Danielle Town

Investing, Business

4.6 • 1.6K Ratings

🗓️ 22 August 2023

⏱️ 32 minutes

🔗️ Recording | iTunes | RSS

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Summary

When we boil down value investing to the absolute basics, the goal is to pick great companies that will maintain a high level of profitability over the long term—couldn’t be simpler, right? In reality, there are an enormous number of factors that can affect whether or not a company is successful, especially in a capitalist system where they have a high degree of freedom to operate without being hamstrung by regulations. While competition is an important feature in capitalism, it can also sap profitability from businesses when too much of their output is focused on separating themselves from their rivals. The key is finding businesses that have unique qualities that allow them to rise above the competition and carve out their own niche within their industry. Join Phil and Danielle as they discuss the various ways companies find an edge in the cutthroat world of international big business, and how investors can use the data and tools available to discern who might come out on top. If your investment research could benefit from tools that can help to simplify and streamline the process, click here for our free Rule #1 Investing Calculators: https://bit.ly/42dBHSn Topics Discussed: Conditions under which companies can succeed Imperfect competition Swiss house cleaning customs Moat vs competitive advantage Calculating return on capital Tangible vs intangible assets Resources Discussed: Glanbia Lululemon Sephora Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Hey everybody this is Phil Town and this is Danielle Town. Wow. Hey everybody. Hey everybody.
0:17.1	Sorry about that. I'm sitting here with my gorgeous daughter, Brilliant Gorgeous.
0:26.4	Oh, I think we should start every podcast like that from now on.
0:29.7	We should. We should. It's invested for everybody who doesn't know what they clicked on.
0:35.0	And it's invested. It's invested. The invested podcast by gosh. How are you feeling?
0:41.2	I'm pretty good. I'm up and around now. I just sound a little better.
0:45.2	The bones got it. It kind of moves a little bit so it's supposed to stay put.
0:50.9	The collarbone moves a little bit. A little bit when I'm when I'm a little
0:54.7	do too much, you know. And I found out I broke a rib so that explains the desire I have to not
1:01.0	cough or breathe or talk probably. Yeah, don't laugh. I shouldn't laugh. Don't make me laugh
1:07.6	this podcast. Okay, you just give me your wisdom and I'll nod. That's I'll be so wise. I'll be
1:17.0	so wise because we are talking about how to evaluate a company in a country that's that is not
1:25.7	set up like the United States's SEC. And you have to kind of dig for the information.
1:31.7	A little bit. We're kind of playing around with Glanbya right now, which is really turning out
1:36.4	to be something we should probably take a look at deeper. And last time we talked about just sort
1:42.2	of the general getting started understanding the business kind of thing. And now before I dive
1:48.6	into the moat side of things, moat is so critically important. The whole idea you guys
1:54.3	of investing is that we want to buy a few companies in our life and we got to pick them really
1:59.1	carefully. And what will make it possible to just buy a few companies in our whole lifetime
2:05.2	is that we're picking companies that can continue to function with high degree of profitability
2:11.6	forever. That's the idea. Of course, nobody can forever. It's too long. But then again,
2:17.7	we don't have forever anyway. So really need just to have them function really well for a long,
	...

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