 Good day, fellow investors. Now, do businesses have a mode? Thus a durable, competitive advantage today. Technological world, everything changes very quickly. Just think about the mobile phone you used 10 years ago or 7 years ago and the mobile phone you use now, the different television, the technology, the car, the navigation system, who uses Garmin anymore. So everything changes very quickly and then it's important to see when you invest. Okay, I'm investing in this stock for the short term. Does it have a durable, competitive advantage or a mode? You want the mode in a business to be as large as possible and then you have to see whether it's going to be changed, where it can change in the future. A business that has to constantly adjust itself to keep that mode is going to very likely lose that mode. If you look at Amazon they are investing so much money just to stay ahead and they will continually have to invest that money. So it's very interesting to see whether it has a mode or not. Let's look at six criteria for determining whether a company has a mode. The first one it has to be a low-cost provider. So if a company can constantly be the cheapest one offering a satisfying product to customers there is no need for customers to switch to something else. Just think of Facebook messaging, platform, WhatsApp. For them it's really it's cheap. There is nothing it doesn't cost anything so that's why people use it. If it starts to cost people are immediately going to switch. So Facebook has to be careful when monetizing that. Apart for the low cost the second point is high switching costs. I'm using Microsoft for me to switch to a Mac or something like that is a high switching cost. So I use both especially for video editing. Nevertheless we'll see whether it's something is going to make it easier for me to switch. I expect that there will be a disruptor there. Somebody why is nobody going after Microsoft? Is Microsoft so powerful or people are investing in other things? What usually happens in a crisis somebody invents something new. Now people are just taking advantage of what works. Later people will invent something new like the founders of WhatsApp were fired from Facebook I think. Very interesting how that works. Number three is the network effect. Amazon is clearly dominating online retail and if you want to sell something you have to be on Amazon and customers are looking at Amazon. However I live in the Netherlands there is no Amazon here because there is another player from Aho and it's called bold.com and they have also such a powerful they have 2200 stores so they are even better than Amazon where they distribute their products and everything. However their margins in their supermarkets in their actual old-fashioned retail are higher than their online margins even if they have total dominance. So yes they have a network effect but going back to the lowest cost provider and actually being able to monetize that that's another question. The fourth one of course strong brand name however that also changes. Now you can get informed. Negative publicity goes out very quickly Coca-Cola was the strongest brand. Now people drink less and less Coca-Cola because it starts to get a negative perspective on it so even brands can fade. Number five economies of scale and this is something that still works. If you build I don't know hydroelectrical dam nobody's going to build another one next to you because it's unprofitable. If you build a power line if you build a road nobody's going to build another road because then nobody makes money. So that's our very interesting things to look at and see how it evolves and really find durable competitive modes in this environment. There are some brazilian highway companies I will recheck them and make a video about them because those are interesting mode durable mode businesses. And the sixth thing that you can always look for durable competitive modes is government protection. Is a company protected by the government does it have a monopoly and you can find that in emerging markets. Today not so much even google is fine apple is fine everybody's fine by a european union. Microsoft was back in the past because they don't like those companies getting too big. To conclude in this environment perhaps owning a stock forever like buffett did in the 1960s is not such a good idea anymore. Perhaps owning a stock for five years the stock I owned from 2003 to 2007 that was a 510 bagger is now bankrupt. So it's very interesting how things change very quickly and that's why you need to constantly watch what's going on. Does it meet your criteria if not as to the vista you sell and there will be something else. Whether companies today have those modes we'll see after a recession who has a mode who hasn't. Thank you for watching leave your comments if you have any companies that you think has have a mode please leave them in the comments below share it with us we love to discuss them and see perhaps if it is a good investment where we can invest. I'll see you in the next video.