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By Andrew Leckey
Every company is looking over its shoulder these days.
The number of firms with a "wide moat" that presents an almost insurmountable obstacle to potential competitors has been declining.
Rapid-fire innovation, technology and globalization mean challengers can arise from almost anywhere. A company can also have a wide moat in a business that isn't the money-maker it once was. Or a firm can become so enormous that it is difficult for it to significantly increase its profits.
Take personal computers, for example.
News events, such as the oil spill of BP or the government's civil suit against
"Competitive advantage these days is difficult to obtain and it is difficult for a business to have an indefinite wide moat," said Richard Cripps, chief market strategist with Stifel Nicolaus in Baltimore. "Pay careful attention not only to a company's competitive advantage today, but also how good the company will be in adapting to inevitable changes from technology and globalization."
"Wide moat companies don't necessarily correlate to good investments, because if they did, why do they have to spend so much money on advertising?" asked Arthur Hogan, director of global equity product for
The combination of
"Companies are nipping at the heels of wide-moat companies such as Phillip Morris, Coca-Cola, Clorox and
Discount powerhouse
Despite plenty of competitors and the fact that cheaper versions of its products can be produced by others, Apple's brand image and products keep it well ahead of the pack. One challenge it faces, however, is that it is best known in the U.S. and not as popular in growing international markets.
Here are stocks of additional firms enjoying wide moats:
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More recent arrivals on the corporate scene than such storied companies can also have a wide moat.
"It could be argued that the search engine
Available at Amazon.com:
Investing - Many 'Wide Moat' Companies Losing Competitive Advantage | Successful Investing
© Andrew Leckey
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