Companies that monopolize have ‘four’ characteristics.
You need to buy company stocks with these characteristics (Brian Feroldi).
“1. High sales growth”
Companies that monopolize make more than 20% of their sales.
Sales growth is really important because it’s the engine that drives profit growth.
Profit growth is the engine driving the rise in stock prices.
“Find a company that can grow sales by more than 20% over decades,” Ferroldi says.
“2. Word-of-mouth advertising.”
Ferroldi says, “The best advertisement is the lack of advertising.”
The best advertisement is Word of mouth. The power of this word of mouth is huge.
Word of mouth is like “human-to-human virus transmission.” Or it’s like “bokli.”
That’s why we ask you to invest in a company that makes products and services for customers to do all the marketing.
“3. Pricing power”
Having the pricing power of products and services is a ‘dominant’.
It’s like there’s no competitor, it’s dominating that market.
As a result, they ask you to find companies that don’t lose customers even if you raise prices, and companies that create more value.
- Wider moat (barrier to entry)
Monopoly companies continue to expand their moats.
The moat can be expanded into network effect building, low-cost production, and branding.
As a result, we are told to find companies that continue to build a competitive advantage.