432- Perfect Competition

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.

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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

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