Hi Mike,
Yes, the question was indeed vague. Sorry about that, but that's how it came to me too. <g>
For further clarification, price is not an issue. The person who asked me was rather sophisticated in his tech understanding and had enormous tolerance for risk. This inquiry was based on a buy and hold forever. Given that kind of horizon, it's hard to see anything but sustainable competitive advantage as being the key driver behind the investment ideas.
On issue-specific matters, I think a company's franchise value is important, and that is often made evident through its profit margins. Of course among other things, that's one reason why Gemstar was on my hit list. On Baseline for example, from my narrow list, it's the only one ahead of MSFT in terms of the 5 year average net margins. Margins such as MSFT are the result of solid, sustainable competitive advantages, and to find more companies with a similar type of heft, that leads naturally to the G&K hunting grounds, which leads further to asking Mr. G&K himself, Mike Buckley. :o)
Bottom line, who's got the dominating competitive advantages that can leverage itself into sustaining high economic returns?
Thanks for your interest Mike.
Rainier |
