Oceans

I read an interesting post today about Google -- here is the link:

http://seekingalpha.com/article/49892-google-vs-microsoft-blue-red-ocean-earnings-productivity?source=yahoo

and that led to an interesting article about something I had not heard of yet -- red vs. blue oceans:

http://www.insead.edu/alumni/newsletter/February2005/Interview.pdf

Like most corporate strategy type stuff the advice appears to be obvious common sense stuff but I think its very interesting and worth spending the time to read.

In the secular value investor's portfolio I can see blue oceans in:
Goog, ILMN, GGG, FLIR, UEPS, TSRA, CME, FDS -- now some of those are more accurate than others. I definitely agree with this blue ocean concept -- I would also carry it towards business models too -- almost every industry has at least one company that has figured out a way to earn good returns in that industry -- southwest airlines, landstar trucking, etc. These are companies that are able to earn very high unlevered returns on equity in industries known for average or below average profitability.

enjoy the reading -- let me know what you think