In my Jan 2021 mail to Tanko, I wrote “https://www.fool.com/
Q: how reliable is an annuity like Allianz Income Protector, SocialSecurity or CPF-life?
A: There are always naysayers. They point at inflation (uncertainties grow over long horizons), international interest rate risks, national fiscal policies, even trade wars! I mean, which country on earth is forever safe?
Singapore government has the will and the way to sustain the annuity. So does U.S. government and insurers.
Q: how safe is the dividend of T:US or any stock on earth?
A: At any time, there will be bears. They point at long-term risks, evolving competitive landscape,,,
I choose to look at the track record and I choose to trust the management. They have a moat, a brand, a high ground to defend and grow their business. Why would they have no choice but become a sitting duck?
No company is free of threats. Having a threat is not the same as surrender and implosion. Yes many iconic companies have fallen (Yahoo, Motorola, Nortel, Nokia… in tech) but many more have survived multiple threats, crises and challenges.
Eg: “With the world-wide decrease in smoking in the 21st century, shares of Philip Morris were no longer considered the ‘safe haven’ they once were.” Personally I would say this is a long-term trend, but in the 20-year horizon, my DYOC may stay above 4%. Question is “can NAV recover?”
— moat: strengths are relative, limitations are absolute.
context: In Value Investing framework, moat protect profit and dividend
For most moats, the strength is never absolute or permanent. We can only identify relative strengths.
- T:US is one of the biggest phone networks
- O:US has a large portfolio and strong reputation so it can attract reputable tenants, negotiate good lease terms. It also has good cash flow to withstand economic down turns better than competitors
- XOM?
- GE?
- Baba?