Hazards of Competition

By Ramesh Akkineni

Peter Lynch says, My idea of a great business is one that has a shortage of competitors. In America, we grow up thinking that competition is healthy, which in spelling bees, pie contests, and fund management, it is. But in such industries as airlines and computers, competition can lead to lousy earnings and multiple bankruptcies and is hazardous to human wealth. There ought to be a warning label.

it is always good to have no competitors in one's business ... customers may not like monopolies but as an investor it is always good to buy a monopoly business than get into a commodity business that has few entry barriers ...

As a friend of mine says that her first year of undergrad was the absolute best as she was in the engineering school with a girl to guy ratio of 1:20...that should convince you more than any thing about how it feels like when we are the one of very few in the field...or you can think in reverse by asking some guys how it felt like when they were in the same institute...I felt like being caged or being in a desert...I think most of the guys will agree with me...

Warren Buffett made his fortune and his reputation investing in companies that dominate their markets, from Katharine Graham's Washington Post to Rose Blumkin's furniture store in Omaha. He also advises us to invest in great companies that are only one of their kind and are going to remain great for a long time...

In love, in business, in most of the things we try to do, it is better to have no competition...

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