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Author: awesomestockdude Big red star, 1000 posts Ticker Guide Supernova Odyssey 1
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Subject: Re: Marvel Write-Up Date: 7/17/2009 3:16 PM
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Just some food for thought, something else to consider about a company's economic moat is, not only "does the moat exist right now" but also "will the moat continue to exist a year from now, two years from now, five, ten? Is there anything the company could accidentally do that would destroy that moat?"

Hi Sean! It's awesome to have someone else on this board to keep the conversation running!

Let me answer the questions you brought up. First of all, I believe that they have a moat that will continue in the years to come mostly from a strong brand name. As I said in my write-up, Marvel has over 5,000 characters under its name, so this leaves the company with a whole bunch of possibilities for the future. Of course, not all super heroes would have a big impact and a strong appeal with people, but there are definitely some characters who would. Also, by going into a new market by making movies, this brings in many more advantages, but also more risks. However, I believe that this is a smart move for the company and that they have handled the situation perfectly through The Incredible Hulk and Iron Man. By changing where the business is heading it makes it more difficult to judge their moat, but at least their brand makes things obvious. Over time, as the company matures in this way of business, we will be able to have a better idea of the moat.

And yes, there is always something that could harm a company's moat. The largest thing that would impact Marvel's moat would be if one of their movies bombed. They might be able to live with one bad outcome, but if this consistently starts happening, it would be time to look for other options with your money. Of course there are things that would hurt any successful company such as new management and people taking less interest in the items the company produces. We will just have to be on the lookout for these type issues to arrive.

Currently the price of Marvel is around $40, which is much higher than when I wrote my write-up. I currently have a limit order in at $26.50. I don't know if the price can go down that much, but I have my fingers crossed! After all, there is not much action in the company this year so sales and earnings should fall quite a bit.

Best,

Aaron
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