May 30, 2016

Greetings from Morecambe, England. A tourist area on the western sea. Not far from Scotland. Quite an older area which makes it more interesting.

On Friday, markets and our stocks were mostly up modestly. Oil is hanging in at over $49 as of early Monday.

A story today suggests Boeing and Airbus will lose their duopoly on aircraft of the size of Bombardier’s C series (about 100 to 150 seats). If so, it has been a weak duopoly in any case as legend has it that competition has always been fierce with discounts and rumored government assistance.

The level of profit in an industry is not always that much affected by the number of competitors. For example, people claim that Canadian bank profits are high due to the low number of banks. In fact we have a large number of banks but the profits come from the way we are tied into our banks. We tend to stick with the same bank for years and decades due to convenience and it is that characteristic which is more responsible for the way they can make profits on fees than any lack of competitors.

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