Asleep At The Wheel

      The group Asleep at the Wheel may be the greatest band you never heard of. They formed in 1970 and have since released 20 albums and had 21 singles listed on the country music billboard charts. In 1975 "The Letter that Johnny Walker Read" peaked at #10 on the billboards charts. They had a clean, fresh sound that was a refreshing break from the hard rock I often listened to in my youth. There is also another group who have been asleep at the wheel for many decades; the Federal Trade Commission and their counterpart called The Antitrust Division of the US Dept of Justice. Their mission is to "Prohibit acquisitions that create or enhance market power". Does anyone actually think that Amazon does not have enhanced market power? Over the last 20 years, Amazon has taken over at least 128 other companies. Alphabet, formerly known as Google, has acquired at least 200 companies since 2016.  Facebook has acquired at least 85 companies during their rapid growth phase. So whats the problem? First of all, does anyone think the mentioned companies are not already monopolies? Why should they be allowed to buy-out their competition? Secondly, these smaller companies, if allowed to compete as separate concerns could possibly become powerful competitors themselves, giving consumers more choices. This concentration of market power also has the effect of increasing the wealth disparity often talked about by liberal politicians like Bernie Sanders and Elizabeth Warren. While I am not a Socialist or a liberal, they have data that gives their argument a lot of credibility. The risks to my diverse portfolio from these behemoths are great. For instance, just the rumor of Amazon going into the pharmacy business caused CVS to fall and stay at a depressed valuation due to the threat of a competitive price war. Yes, in the short run, lower prices for the consumer is welcome, but when one company dominates a market, prices are bound to rise in the long run. The whole concept of achieving market dominance is to control prices. It may seem like I am targeting just the FAANG stocks, but this has been going on in many industries for decades. Energy, Steel, Pharma, Communications, Banks, Rail, and Technology companies have grown their footprint through acquisition rather than through organic growth. The longer this unbridled consolidation occurs, the more painful the cure will be for stockholders and consumers. Maybe its time for the FTC to wake-up and say no.