minchinyon- about the margins- youre shooting from the hip. Not...

minchinyon- about the margins- youre shooting from the hip. Not enough research. Tut tut. When you study economics one thing in microeconomics -the study of the economics of industries- is Barriers to Entry. These are barriers to entry of new competition. In some businesses these are low or nonexistent. Returns in these businesses tend to be lowish (a "normal return" because anyone can set up in competition. eg lawnmowing.
In the gaming machine industry barriers are extremely high- and a lot of them are licensing, and protected patented technology.
You cant just set up making poker machines and sell them.
..Most of the technology will have patent protection, and it is improving all the time. It takes many years to build up.
..Until then a brand name has to be built up. Not easy.
..Then there are massive licensing restrictions-it takes ages to get licenses where you want to sell. Its all about keeping organised crime out of the business.
..Then you need international distribution and servicing network in most regions and many countries. Thats megabucks.

End of compact microeconomics lesson.

There are just two majors. ALL is one of them. The main competitor cannot take it over because of antitrust rules and blocking stakes held by the Ainsworth family, about 30%.

No doubt the current class action is scaring some punters. However the company is not that worried- and the other day I had a yarn to someone who used to work there at a high level. Repeat used-no current management association. His view was that it was always policy to have insurance for this sort of thing, as it is in many businesses. So they may well be covered, anyway.

If youre shorting you're welcome. Ive just got in and doubled my holding at these prices. Thank you muchly, shorters. Have some catching up to do. Once upon a time not all that long ago I bought 100,000 ALL at about 27c-50c, from memory. Sold out in batches, he last lot at about $5.50 Then they went to $17.00! Arrrgh.