Thursday, July 12, 2007

Crocodiles and Competitive Advantage

My son is four and loves watching Animal Planet, especially when it shows reptiles. I was watching the other day and realized that crocodiles have the ultimate in competitive advantage.

1) They sit comfortably in water all day long, not wasting energy. Less energy expended means less food needed to stay alive.
2) They wait for prey to come to them since the other animals need the water to survive. Again, less energy expended. He sits like a patient investor waiting for the fat pitch.
3) The murky water hides their presence. The poor victims don't know what hits them until it is too late.
4) The crocs don't have to kill directly and risk injury, they just need to drag the prey underwater until the animal drowns. Talk about a killer moat!
5) There are no other top predators in the water competing for food. Hippos are mean but are vegetarians.
6) Warren Buffett talks about change as being the enemy of investors. Crocs have remained unchanged for literally hundreds of millions of years.

If crocs ran a public business selling animal hides or steaks, I would definitely buy the stock, assuming it was selling cheap enough. =)

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