“You’re Only as Good as Your Dumbest Competitor”

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This quotation is attributed to Gordon Bethune, who, at the time, was CEO of Continental Airlines. 

Investors should take note.  No matter how well run you believe the companies in your portfolio may be, it is important to recognize that the actions of competitors are material.

It is probable that Mr. Bethune was thinking about some of the tactics his competitors may have applied in seeking to gain market share, but competitor actions are important in most industries.  For example, if one of the major auto companies increases incentives, to gain share and/or clear inventories, everyone has to consider their response.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA

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