Monopolies And Oligopolies

I remembered in my secondary school geography textbook there was an example of a bakery shop opening in a new town, which, for a while, had enjoyed good business since it had a captive market. Soon, a second one opened and half of the town’s population began patronizing it. Then, a third one started, and naturally some customers from the first two began to buy from it. By the time a fourth one was in business, the other three were lamenting at the newcomer on why he/she did not choose to open anything other than a bakery.

Picture generated by Meta AI

 

Assuming the town’s population remains unchanged, the quality of the bakeries is the same and everyone takes bread or cake daily; the more bakeries there are, the lesser revenue/profit each bakery would get, ceteris paribus, which explains the frustrations of the first three bakery owners. In economics, this is called competition, where various firms are offering similar products and/or services to a (or a few) market or population.

 

Competition is good for consumers as it gives them a huge range of product choices. In an economic sense, there is price discovery where there are agreed-upon prices of products between buyers and sellers, thus making them reasonable. Conversely, there are market conditions called monopoly where there is only one seller, and oligopoly, where there are only a few sellers. 

 

While an oligopoly can be considered, to an extent, as competition, there are times where oligopolistic sellers would collude and fix prices that look fair on the surface, but they are not. Similarly, in a monopoly situation, the price of a product is determined on the whims and fancies of the sole seller, rather than free market forces. The collusion actions disrupt the price discovery mechanism and result in some distortions in the markets. This is why market regulators clamp down on such monopolistic and collusive actions to level the playing field and prevent extensive profiteering.

As consumers, we applaud the antitrust actions of regulators against monopolies and oligopolies to make product and service prices fair and affordable. On the other hand, however, as investors we prefer our equity holdings to be in monopolies and oligopolies because they reap in huge profits for shareholders. Very ironic indeed.

 

To make things more complicated, nowadays products and services are similar in nature but differentiated with one another, which also posed challenges to regulators as what is seen as antitrust by one party may not be seen as such by the other. For instance, in the 2024 lawsuit filed by the United States Department of Justice (DOJ) against Apple (and it is still ongoing), the DOJ alleged that Apple utilised its locked-down iPhone system to build a monopoly, to which Apple replied, among other reasons, that it did not possess a market majority to be claimed as monopolistic¹. Apple is correct in a way: as of October 2025, the Apple iOS market share worldwide was just 27%, and compared to Android, the other competitor in the field, stood at 72.59%².

 

From an investment standpoint, regardless of ideological considerations, shareholders in monopolistic and oligopolistic entities should remain cognisant of the potential impact from lawsuits and regulatory actions, as these factors may influence future profitability and operational stability.

 

Disclosure

 

The Bedokian is vested in Apple.

 

Disclaimer

 

1 – Feiner, Lauren. Apple files motion to dismiss DOJ antitrust lawsuit. The Verge. 2 Aug 2024. https://www.theverge.com/2024/8/1/24211386/apple-motion-to-dismiss-doj-antitrust-lawsuit (accessed 3 Nov 2025)

 

2 – Mobile Operating System Market Share Worldwide. Oct 2024 – Oct 2025. GlobalStats. https://gs.statcounter.com/os-market-share/mobile/worldwide (accessed 3 Nov 2025)

 

"Triple A" Results And Going Forward

Picture generated by Meta AI

The past few days had seen the announcements of quarterly results for the “Triple A” companies: Apple, Alphabet and Amazon, with all three beating their revenue and earnings per share (EPS) estimates. Here are the revenue and EPS summaries for each company (Fig.1):

Company	Revenue (Actual, in billions)	Revenue (Estimated, in billions)	EPS  (Actual)	EPS (Estimated)
Apple	102.47	102.24	1.85	1.77
Alphabet	102.35	99.89	3.10	2.33
Amazon	180.17	177.80	1.95	1.57

 

Fig.1: Revenues and EPS of the three companies. All figures are denominated in United States Dollars (USD). Data sourced from CNBC.

In addition to surpassing both revenue and EPS estimates, the companies are signalling a positive outlook for the future. Expectations are high for increased revenues in the upcoming quarter and a potential rise in capital expenditures heading into 2026. This anticipated growth is primarily driven by the ever-expanding influence of artificial intelligence (AI) across products, applications, and infrastructure.

Alphabet and Amazon: Cloud Expansion and AI Investment

Alphabet and Amazon, alongside Microsoft, form the leading trio of global cloud providers through their platforms—Google Cloud Platform, Amazon Web Services, and Microsoft Azure. These companies have reported significant revenue increases in their cloud segments, with Alphabet experiencing a 34% rise and Amazon seeing a 20.2% jump. This upward trend, coupled with plans for substantial capital investment, underscores the projected growth of AI within their operations.

However, this rapid expansion has prompted some investors and analysts to voice concerns about a potential bubble forming in the AI sector, particularly noting the circular deals occurring among major AI players. Assessing the true stage of the AI lifecycle is complex, as factors such as technology, adoption, execution, and tangible outcomes often progress at different rates, sometimes leading or lagging each other. A key issue is whether the significant capital being allocated to make cloud services AI-ready will ultimately be accretive. Depending on how these elements align, there is a risk that the combination of factors could result in periods of over-supply and under-demand for cloud infrastructure, potentially triggering a "bubble popping" scenario.

Despite these concerns, longer-term indicators suggest that "AI is here to stay”. While AI technology has existed for some time, public awareness surged with the introduction of ChatGPT. This milestone sparked the emergence of additional AI-powered applications, some of which have already achieved success in user adoption and are likely to become significant sources of revenue in the future.

Apple: Regional and Product Segment Trends

While Apple has reported a year-on-year sales decline in the Greater China region and in the "Wearables, Home and Accessories" product category (such as Apple Watch and AirPods), other geographical segments and product lines are experiencing growth in revenue¹. The company remains optimistic that demand for the newly released iPhone 17 will help reverse the downward trend in Greater China during the current quarter.

Historically, the first quarter of Apple’s fiscal year—from October to December—has generated strong revenues, driven in part by holiday season sales, including the Christmas period. These seasonal factors typically contribute to an uptick in the wearables segment, which are popular as gifts.

Furthermore, improvements to Apple Intelligence, including the integration of ChatGPT, are expected to serve as a significant catalyst for Apple’s future growth, given the company’s vast installed base of devices and loyal users. While other brands have already introduced AI capabilities in their products, Apple’s strong customer loyalty remains a key factor likely to fuel the company’s next phase of expansion.

Disclosure

The Bedokian is directly vested in Apple, Alphabet and Amazon.

Disclaimer

1 – Apple reports fourth quarter results. Apple. 30 Oct 2025. https://www.apple.com/newsroom/2025/10/apple-reports-fourth-quarter-results/ (accessed 1 Nov 2025)

Passive Investing Simplified?

Investment legend Warren Buffett included investment guidelines in his will for his wife, recommending 10% of cash be allocated to short-term government bonds and 90% to a low-cost S&P 500 index fund. While this approach may seem unexpected given his reputation as an investor, the reasoning is practical: many individuals lack expertise in selecting specific equities, so investing through an index is a straightforward alternative.

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A common method for index investing is via exchange traded funds (ETFs). Index ETFs aim to replicate the composition of their underlying indices as closely as possible. These products appeal to passive investors—those who invest with minimal ongoing management and periodically rebalance their portfolios.

Using asset class diversification, it is feasible to construct a diversified portfolio with just two ETFs for an equity-bond mix, or up to four or five for broader diversification strategies such as the Bedokian Portfolio. However, the extent of diversification depends on several factors.

Selecting global equity and bond ETFs, along with additional options like global real estate investment trust (REIT) ETFs and commodities ETFs, can provide broad market exposure. However, true diversification may be limited by the weighting methods of the indices and the corresponding ETFs. Market-capitalisation weighting assigns proportionally higher representation to larger companies, while equal weighting treats all constituent securities equally. Market-cap weighted ETFs are more prevalent, which means that sectors and countries with larger companies, such as U.S. technology firms, tend to dominate these indices, potentially reducing diversification.

To achieve better diversification, additional ETFs targeting specific regions, countries, or industries may be required to manage concentration risk. As a result, investors might select multiple ETFs for each asset class rather than relying on a single fund. Further considerations, such as bond duration and property types within REITs, also affect diversification.

Passive ETF investing remains one of the most straightforward approaches compared to other investment styles. While complete diversification across all levels is challenging, selecting appropriate ETFs for each asset class can provide reasonable market coverage with some compromise regarding regional or sectoral biases. The primary goal of investing is to benefit from compounding returns that outpace bank savings rates and inflation.

Disclosure

The Bedokian is vested in the S&P500 via the SPY ETF.

Disclaimer

OMGS! (Oh My Gold and Silver!)

Never had I seen a sudden interest in masses of metal, shiny yellow and gray ones to be exact, and in the shape of coins and bars. I was taken aback by social media videos of long queues at bullion shops where in my previous visits, there was not much of a huge crowd then. And this phenomenon not only happens in Singapore, but elsewhere lines are forming, even at gold jewellery retail outlets.

Picture generated by Meta AI

Recent news had reported gold returns had surpassed the S&P500’s for the last 20 years, with an average annualised return of 10.9% versus 10.5%, and a total return of 690.8% versus 632.1%¹. This could be explained with an exponential climb of gold prices between 2023 and now, specifically from the first quarter of this year.

Silver also took the limelight recently, surpassing the last high back in March 2011. Within the space of just six months since April 2025, it had risen close to 60%, mimicking the steep climb experienced by gold. This is likely the result of a perfect convergence of silver being gold’s spillover substitute and its usefulness as a raw industrial material in (after many degrees) of driving artificial intelligence (AI) growth.

Frankly, being FOMO (fear of missing out) on gold and silver is a bit of an oxymoron; such FOMO-ness on these precious metals usually occurs when the markets (and skies) are falling. Yet, we are seeing boomtown events in equities particularly on AI, and on real estate due to the faster-than-expected interest rate drops. Furthermore, a weakening US dollar (which is seen as inversely correlated with gold), interest rate cuts, and the dedollarisation plus central bank gold buying, had given the suggestion of further price strengthening, not to mention of the finite supply unlike fiat currency.

After taking into consideration of the above, the next question logically would be: is it too late to enter gold and silver? It depends.

The Bedokian Portfolio espoused between five and ten percent into commodities, which included gold and silver in the make-up. Hence, if one had started including these commodities in an investment portfolio in the first place, then it is only a matter of rebalancing by averaging up the holdings, whether through physical or paper (exchange traded funds or ETFs, gold/silver saving accounts, etc.). 

However, if one wants to go into gold and/or silver for the first time, taking the first step is the most important, for it is a way to have one’s toehold into the commodities asset class, and from there average up or down depending on his/her rebalancing period and/or set entry price levels.

There is no way to tell how high (or how low) gold and silver would go, so therefore in the meantime, let us enjoy the ride. 

Disclosure

The Bedokian is vested in physical gold and silver, and in a silver ETF.

Disclaimer

1 – Comparing S&P 500 and Gold: Building resilient Singapore portfolio in 2025. StashAway. 8 Oct 2025. https://www.stashaway.sg/r/snp500-gold-assets-comparison (accessed 17 Oct 2025)

AI Bubble?

Picture generated by Meta AI

By now, one must have read a lot of financial news, social media posts and videos, and of course blogposts about the inflating bubble in the artificial intelligence (AI) sector and its related industries. Not missing out on the bandwagon, I decided to write a short post on my thoughts.

Some analysts and fund managers were warning of a potential AI bubble coming like the dot-com bubble that happened at the turn of the century, and recent news reports are fuelling this viewpoint. To name a couple, a recent MIT study had found 95% of enterprise AI projects failed to turn a profit¹, and there were the reported interconnected business deals between AI-related companies (e.g. the Nvidia-Oracle-Open AI circular deal) not dissimilar to those made in the late 1990s.

Should the bubble explode, the notion is that not just AI stocks are going to get hit the hardest, but there would be a ripple effect across the entire equities market as seen in 2000 and 2008. Every sector and industry would be hit at least for that moment as market participants are chasing for liquidity at the first instance (which I had explained here before), so expect a counter that has nothing to do with AI would go down temporarily.

It is beyond our pay grade (and divinity grade) to know whether the whole thing is going to burst, but here are some of my takes going forward and how best to prepare for the eventuality occurring.

#1: AI Is Not New

There were at least two investors whom I had spoken to have the impression that AI started in November 2022, which was around the launch date of Chat GPT and thus sparking off the entire revolution. However, AI already had its roots back in the 1950s and slowly evolved over the decades. The advances of processing power and large amounts of data and information available provided the growth catalysts needed, especially in the domain of generative AI via large language models (LLMs) that most layman people know about.

#2: Sectoral Sensing

Using November 2022 as the cut-off time, we shall look at a proxy counter that could be considered a part of the AI-boom: Keppel DC REIT (KDC). After listing in December 2014, its first steep rise was not during 2022, but a bit further back in the second half of 2019, reaching its twin peaks in 2020 to 2021. This was the COVID-19 and its immediate aftermath period, when working from home was seen as the way-to-go and the importance of platforms supporting it, thus the need for more server space.

After the launch of Chat GPT and the sensing of everything AI has heightened, KDC managed to go up gradually, likely due to the tampering effects of interest rate hikes, now at price levels not reached since late 2021, so in a way the AI boom is probably not as strong as the upshot brought about by COVID-19.

While it may sound prejudiced to use just one counter for comparison, the message is that data centres had shown its relevance in our already digitally connected world. AI just served to add on a huge demand for them.

#3: Cusp Of A New Era?

One of the main reasons for the dot-com bust was the insatiable appetite of everything and anything internet, even on companies that had no revenue or products to show for. In other words, what the investors did were ploughing into potentials, hopes and dreams, or worse, castles in the air.

This parallel was echoed by the people who were convinced of the bubble, and the 95% MIT report did not help in alleviating the thought. With the “all-things-internet” and a slew of accompanying features like social media, e-commerce and “everything” platforms (e.g., WeChat, Grab, etc.), one could say that the 2000 crash brought about the beginning of a new period, and investors back then were “too early” in their calls.

Coming back to the present, though there are not many useful use cases for AI, we are, by my reckoning, still in the tail end of the early adoption stage. Sure, there were news of companies firing staff due to being replaced by AI, only to recall them back when their AI initiatives failed (likely the 95%), but learning, like the AI technology, is evolving, and companies and people would adapt them holistically, sooner or later. So, we may be seeing the cusp of a new era unfolding.

#4: Stay Diversified

Coming from me, this is a must-have in my blog posts about bubbles and crashes. In the very short run, everything seems to be going down in a crash, but eventually some would rise faster than others due to their distance from the epicentre of the bubble explosion, i.e., correlation.

Some had advocated going into different sectors and industries for diversification, but I would prefer to go on a higher degree and that is asset classes, because their correlation is more varied due to the different behaviour in different market conditions. While there is undoubtedly damage felt in the portfolio from the burst if it happens, it would probably be lighter as different asset classes react differently to the situation.

Disclosure

The Bedokian is vested in Keppel DC REIT, Nvidia and Grab.

Disclaimer

 

1 – Estrada, Sheryl. MIT report: 95% of generative AI pilots at companies are failing. Fortune. 18 Aug 2025. https://fortune.com/2025/08/18/mit-report-95-percent-generative-ai-pilots-at-companies-failing-cfo/ (accessed 11 Oct 2025)

We’ll Get There Fast And Then We’ll Take It Slow

This blog title was taken from a line in the 1988 song Kokomo by The Beach Boys that described two lovers taking a trip to a Caribbean island.

Picture generated by Meta AI

Though it sounds a bit oxymoronic as in going there fast and then reduce the pace, but from a honeymoon trip’s point of view, it is an incentive to hurriedly go to the vacation spot and just chillax upon reaching the destination.

On the economic front, this phrase was used to describe the United States Federal Reserve’s strategy in combating high inflation back in 2022. The “get there fast” referred to the rapid interest rate hike to bring inflation under control, while the “take it slow” was the gradual lowering of interest rates as inflation began to cool down.

From a portfolio management perspective, this could mean “rushing” one’s portfolio to a set value before “calming” it down. In other words, the portfolio would be heavily laden with high-growth/high-yielding/high-risk securities, and once the portfolio hits the mark, it would be pivoted towards more prudent income generating/safe-haven assets/securities.

However, it is not necessary to adopt two extreme approaches to do the “get there fast, take it slow”, i.e., accelerating full speed and then stepping on the brakes. Both ways could be done in a deliberate and measured manner, considering one’s comfort level on the portfolio mix and risk appetite and tolerance. 

A good example would be our pivot (which I had described in detail here) that we took six to nine months shifting from a balanced Bedokian Portfolio (35% equities, 35% REITs, 20% bonds, 5% commodities and 5% cash) to a slightly aggressive make-up (15% bonds, 5% commodities, 5% cash, and with the remaining 75% equities/REITs in a free-float from 40/60 to 60/40). It was a slight shift as we still wanted to have the important element of diversification, balancing between a slower growth with some degree of capital preservation. For the slowing down, we had planned to pivot with a less aggressive portfolio depending on the prevailing market and economic situation, with the transitioning taking probably over a period of nine months to a year.

If one thinks about this whole fast-slow scenario, it is akin to the principles of age-based portfolios, with an aggressive structure for young investors, a balanced mix during middle-age, and finally a conservative one at conventional retirement age. The main difference is just that an objective amount is the catalyst for the change in asset class proportion, rather than be dictated by one’s lifetime stages.

 

Disclaimer

The Trading Portfolio Handbook eBook (and it’s free by the way)

In my first publication The Bedokian Portfolio, I had a chapter on the Portfolio Multiverse, where an individual would plan, manage and organise multiple portfolios based on each portfolio’s objective(s) and characteristics, and the individual’s risk appetite, risk tolerance, knowledge and allowable time for the portfolios, asset classes and/or financial instruments used in it. The idea of a trading portfolio was briefly introduced in the Portfolio Multiverse. 

While there were suggestions on including a section on trading in The Bedokian Portfolio, I would prefer it served as a basic and broad introduction on investing for beginners, and wanted to remain as it is. Thus, resulting in this spinoff companion publication. 

The Trading Portfolio Handbook: Companion Guide to The Bedokian Portfolio is not an instruction on the strategies and methods of trading derivative instruments like futures and options, nor it is a comprehensive manual to look at charts, drawing lines and recognising patterns. Rather, as the title contains, this handbook acts as a guide from my perspective. Trading is seen as frequent transacting of counters over the course of seconds to years, but I also categorise some sophisticated and speculative financial instruments such as derivatives and cryptocurrencies for inclusion in the trading portfolio.

This (very) short eBook guide is available for download, either scan the QR code on the right or click on the "Download the free eBooks and paper" tab above and look for the download link. It is free by the way.

Enjoy the guide and hope you would find some useful tips and information in your trading journey, if you decide to embark on it.