Moats With Crocodiles
chris.sol 馃嚞馃嚙@chrisdotsol
The idea
I believe AI is making knowledge and code moats easy to copy, but it can't copy physical ground. This take owns railroads, pipelines, and towers that carry things; permitted sites like landfills and quarries that almost never get approved again; and resources in the ground like royalties, copper, and land. It's spread across all three so no single holding carries the thesis, with a small cash buffer and a long holding horizon. I'd rethink it if these physical chokepoints stopped being scarce.
What will be bought
- New transcontinental railroads and major pipelines almost never win approval today, so the existing networks that move freight and fuel keep their pricing power. 路 Williams CompaniesIt runs Transco, the main natural gas pipeline feeding the East Coast, and new pipelines in that corridor almost never win permits., Union PacificIt owns railroad track across the western US that could not be rebuilt today because the land rights and permits no longer exist., CSX CorporationIt shares the eastern US with one other railroad, a two-player setup that has held because nobody can build a new rail corridor through crowded eastern cities., Kinder MorganIt owns the largest natural gas pipeline network in the US, buried along rights-of-way that would be close to impossible to permit again., Canadian Pacific Kansas CityIt is the only railroad running through Canada, the US and Mexico on one network, a route that took over a century to assemble., EnbridgeIts crude mainline moves much of Canada's oil into the US, and nobody is getting approval to build a second one like it.29%
- New landfills and quarries almost never receive permits, so existing site operators face very little new competition. 路 Waste ManagementIt owns the largest landfill network in North America, and new landfills almost never get approved in most jurisdictions., Vulcan MaterialsIt owns quarries near growing cities, and crushed stone is too heavy to ship far, making nearby permitted quarries local monopolies., Martin MariettaIt controls stone and gravel reserves in local markets where opening a new quarry is nearly impossible., Republic ServicesIt owns landfill permits that municipalities almost never grant to new applicants, so it sets the terms for waste disposal., Waste ConnectionsIt relies on exclusive local franchises and landfills in smaller markets where it is often the only option a town has.27%
- Metal deposits, timberland and mineral reserves are scarce physical assets that cannot be replicated, so their owners earn from supply that software cannot increase. 路 Franco-NevadaIt owns royalties on scarce metal deposits that are slow to permit and difficult to replace with new mining operations., Wheaton Precious MetalsIt buys streaming rights to a fixed share of metal output from deposits that cannot be recreated elsewhere., Texas Pacific LandIt owns a large chunk of the Permian Basin outright and collects fees for oil, water and access that cross its acreage., Freeport-McMoRanIt mines some of the world's best copper deposits, and good new copper mines take decades to find and permit., WeyerhaeuserIt is the largest private owner of timberland in the US, and land cannot be made nor can tree growth be accelerated.24%
- Cell tower sites and water systems are protected by local zoning and regulation, making them difficult to duplicate and giving their owners stable long-term leases. 路 American Water WorksIt runs regulated water systems, the pipes under towns that would never be built twice and face strong regulatory protections., American TowerIt owns cell tower sites that local zoning boards rarely permit anyone to duplicate, so carriers rent space instead of building their own., SBA CommunicationsIt rents space on tower sites that are hard to get zoned, and carriers keep renewing leases instead of finding alternatives to towers.13%
- Cash7%