| | | MCO moat. Yes, we don't know about the life expectancy of that moat.
It seems simple enough: competitors come in to automate the process, reduce costs and take market share and margins from MCO.
Also in years past it has seemed simple enough too to folks who've considered entering the market: Not a lot of capital expense: Hire a mix of talented people with expertise, maybe get them to train junior people, and hang out a sign that you're a new company and you do ratings comparable to and as good as the big guys (MCO&S&P), and fwiw, that your doing the ratings offers perhaps a different or additional view of the safety of the instruments being rated.
As I understand it (and I may not), new entrants who've actually tried to compete for customers, have not had a good go of it. Apparently it's been like going with IBM in the old days -- customers/clients go with MCO or S&P because nobody can fault you if there's a problem.
So I'm not so sure that new entrants could come in and successfully attack MCO's business. In other words, at this point I don't view the possibility of new competition as a reason to avoid the stock |
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