Investors often discuss the role of an economic moat as a valuable attribute of a common stock. So what is an economic moat?
How are moats created?
And what can you do to find businesses that have the benefit of a moat?
We’ll dig deeper to explain everything you need to know.
Economic Moats Explained
Patents seem to be the new asset class when it comes to corporate balance sheets. Recently, Microsoft agreed to purchase a portfolio of patents from AOL for $1 billion.
Microsoft announced the sale of 625 patents – all of which came from AOL – to Facebook for $550 million. Facebook will also receive licensing agreements to the remaining 325 patents, and Microsoft will receive cash alongside additional licenses from Facebook’s already existing patent portfolio.
Tech Playing Defense
Another even-numbered year rolls around, and this time it’s presidential election season. As it stands, it appears that either Barack Obama will be elected for a second term, or a Republican challenger, likely Mitt Romney, will be the next president of the United States.
So how will either outcome of the 2012 presidential race affect the stock market?
Divided Government in 2012
Now that Best Buy seems to be finding itself in a precarious position, one that threatens the future of the company, investors are wondering if it’s time to go long Amazon.
In many ways, Amazon is stealing Best Buy’s market share. Yes, Best Buy is primarily an electronics retailer, but it is also a media company. Best Buy has thousands of square feet dedicated to movies and music, two products that Amazon and (in some ways) iTunes are completely dominating.
Best Buy’s Troubles
Groupon GRPN shares tanked on the Monday open as investors started losing love for the company earlier in the year named as the fastest growing company ever. Groupon seems to have more than its fair share of problems, many of which may be deeply rooted in accounting technique and tax law.
Groupon’s Accounting Problems