Views on Life & on Equity Investing

Wonder, Wealth & Abundance

When not to buy Monopoly, Autonomous trend

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Monopoly, or near monopoly or oligopoly, that is where the money is for investors. For over two – six months I had to shake myself of not buying monopoly business. Why? Because there are instances where monopoly businesses are not good. For example:

  • In a bear market how low can the earnings of the monopoly business drop? More than 70%?
  • What is the growth rate? Less than 10%?

In such situations its better to be in another industry where a player with mere 5-6% market shares in a fragmented industry can grow for many years at 20% or more. Even if the industry is not growing or growing in low single digits, this type of company is better than a monopoly business.

My money is on automation, autonomous cars and such things. Although you don’t want to be too early, until commercial feasibility has been proven. It good to see that one of the economically poorest countries of the world, Tanzania, after Rwanda, via its Ministry of Health, has take the initiative to partner with Zipline, California based startup that provides drones delivery.

Tanzania announced that it is launching the world’s largest drone delivery service to provide emergency on-demand access to critical and life-saving medicines. Beginning in the first quarter of 2018, the Tanzanian government will begin using drones to make up to 2,000 life-saving deliveries per day to over
one thousand health facilities, serving 10 million people across the country.

Source: http://www.flyzipline.com/uploads/Tanzania%20Announcement%20Press%20Release%20vFinal.pdf

 

 

I see no reason why this method of delivery will not eventually extend to not just life-saving medicines but anything of any value including a 5$ burger. 90% of the cost of running the taxi is because of the person driving inside it, once that person is out of the picture the economics of the business are completely different.

 

Then, I see no reason why a single individual doctor, surgeon, or any skilled professional is better than sum total of human knowledge, if that can be properly categorized, indexed, retrieved, used and applied. Those type of robots and machines may be decades away but its definitely on the horizon.

Written by amitdipsite

August 25, 2017 at 4:41 am

Posted in Uncategorized

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