Monopoly Investing Explained | MOAT Investing Maxed Out

The S&P 500 is often lauded as the bedrock of a diversified portfolio. That's a lie.

Read Monopoly Hunters' Investment Blog

The S&P 500 achieved a 23.3% return in 2024. However, without the Magnificent 7, that number would have been no more than a 6.3% return.

Monopoly Investing At A Glance

In every era, a handful of businesses quietly levy an “economic tax” on modern life... a swipe fee on every card purchase, an ad sale on every search query, a license on every Windows machine.

Persistent PRICING POWER

Monopolists Defend Margins
When Other Businesses Cut Prices

While the S&P 500’s operating margin is ~12 % , toll-booth franchises regularly clock 50–70 % (Visa 65 %, Moody’s 58 %, Mastercard 56 %), creating more retained cash for buybacks and growth.

gurufocus.com

SUPERIOR COMPOUNDING

Wide-Moat Portfolios Outpaced The S&P 500 By ~300 bps/yr since 2002.

History shows rising market concentration often coincides with higher average equity returns, thanks to winner-take-all dynamics.

morganstanley.com

LOWER VOLATILITY

Cash-Rich Franchises Stay Profitable Through Recessions, Shielding Investors From Market Volatility

An academic panel of 6,000 U.S. stocks found that portfolios stuffed with the strongest product-market power earned 14-17 percentage-point higher one-year abnormal returns than the weakest cohort.

ideas.repac.org

LOOKING BEYOND THE Magnificent 7

Own The Companies That Own The Market

Adobe Inc.

Had you invested $10,000 into Adobe Inc. stock in the year 2001, the value of that investment would be $130,000 today.
(data correct as of 06/22/2025)

Netflix Inc.

Had you invested $10,000 in Netflix Inc. stock in the year 2010, the value of that investment would be $1,565,000 today.
(data correct as of 06/22/2025)

Characteristics of a Monopoly

—according to Twitter founder Peter Thiel.

Thiel identifies four key characteristics that successful monopolies often share:

Proprietary Technology: This is the most significant advantage a company can have. A product or service that is difficult or impossible to replicate gives a company a substantial lead. Thiel suggests that a new technology should be at least 10 times better than its closest substitute to be truly monopolistic.
Network Effects: A product becomes more useful as more people use it. Think of social networks like Facebook or marketplaces like eBay. As the user base grows, the service becomes more valuable, creating a powerful barrier to entry for potential competitors.
Economies of Scale: A monopoly gets stronger as it gets bigger. The fixed costs of creating a product can be spread out over a larger volume of sales, allowing the company to lower prices or increase profits.
Branding: A strong brand can be a powerful form of monopoly. Companies like Apple have cultivated a brand that inspires intense loyalty and allows them to command premium prices.

Visa Inc.

Had you invested $10,000 into Visa Inc. stock in the year 2001, the value of that investment would be valued at $270,000 today.
(data correct as of 06/22/2025)

Fair Isaac Corp.

Had you invested $10,000 into Fair Isaac Corp. stock in the year 2010, the value of that investment would be $858,000 today.
(data correct as of 06/22/2025)

Meanwhile, $10,000 invested in the S&P 500...

A return of $64,000 if the investment was made 01/01/2001
A return of $72,000 if the investment was made 01/01/2010

TOP MONOPOLY & OLIGOPOLY ETFs TO CONSIDER

The Case For TOLL ETF

This actively-managed fund holds a worldwide portfolio of companies with tangible moats, like essential infrastructure and payment networks. TOLL seeks durable, quality companies with defensible earnings streams and long-term compounding potential across various sectors.

The Case For MPLY ETF

MPLY offers a concentrated, actively-managed portfolio of companies exhibiting true monopolistic power. MPLY's strategy targets businesses with high barriers to entry and dominant brand control, aiming to capture the unique growth potential of market leaders who set the terms of their industries.

Our Overall Pick

The Case For MOAT ETF

This ETF tracks Morningstar's Wide Moat Focus Index, investing in U.S. companies with sustainable competitive advantages trading at attractive prices. offers a systematic, research-backed approach to owning high-quality businesses poised for long-term success.