By
Borsgade
In this research article, Michael Mauboussin analyzes the concept of market share. In essence, Michael argues that market share is an important but insufficient gauge of competitive advantage.
Stability, concentration, markups, and intangibles provide a more complete picture of the ability to create and sustain excess returns. Industry and company-specific analysis is essential.
Case studies of autos, airlines, internet search, and word processing software illustrate how market share, concentration, stability, and markups evolve differently across industry life cycles and competitive dynamics.
Here are the key takeaways from the article:
Market power measures the degree to which a firm can set its price above its marginal cost. A firm with market power creates value by earning a return above its cost of capital. An expansive view of value creation goes from the customer’s willingness to pay to a supplier’s willingness to sell.
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On this CNBC interview, David Tepper, Appaloosa Management founder and president, discuss his thoughts a number of topics, not least his bets on the Chinese market and where he’s finding opportunities.
In this with NYU professor Aswath Damodaran, Aswath shares his unique perspectives on several interesting investment topics, blending academic rigor with practical insights. He also offers his advice for the average investor, emphasizing the importance of focusing on preserving and growing wealth rather than chasing outsized returns.
In this interview with Bloomberg, Cliff Asness from AQR discusses how market inefficiencies are becoming more pronounced and persistent over time.
In this article, Howard Marks argues that while well-intentioned, most government interventions in the economy that contradict fundamental economic principles are doomed to fail and policymakers should respect rather than attempt to repeal the basic laws of economics. The free market, even with its flaws, has the best track record of producing prosperity.
