When analysts discuss how large companies have built in advantages, most people tend to agree, but is harder to define all the built in advantages. Sometimes the advantages have to do with logistics, the credit and cash flow of the company, in many cases quality of management, but often overlooked is the ability to affect the regulatory or legal judgement. Courts are expensive, they are time consuming, often finding methods to delay can be as good as a win, the courts are biased towards large companies. Some and all can be true, although in class action cases sometimes big companies lose.

One method to look at the regulatory advantages is to examine how prior to the civil rights era, the overwhelming advantages of the legal system was in favor of the whites. One such book is called race against time – A reporter reopens the unsolved murder cases of the civil rights era, by Jerry Mitchell, published by Simon & Schuster, NY, 2020.

Many people in the northeast, where this writer lives, we know things happen but unless you live in the area you do not necessary understand all the underlying reasons. In the southern states, slavery was the norm for a 100 years plus, and with slavery came the rationale that blacks were less than whites. It was preached at the churches, it was made institutional into all aspects of life. It was very hard to get around it, for although whites came into some contact with blacks, the thought was individuals were different than all. You might like person A or B, but not everyone. In terms of institutions, voting is when people are equal – we have a secret ballot, no one is supposed to know who you vote for, unless you tell them. To keep an equality of voting, the whites made it difficult for blacks to vote. You might read that the regulations are still being challenged in the latest elections.

When one group treats another group as less than equal, it is very easy to overlook a violent act, because one can easily rationale they had it coming. In the book, some whites shot and kill blacks who were advocating for the rights of everyone else. When the one group has all the advantages and resources of the government and another group asks for a bigger slice of the pie, it stands to reason the dominate group will tend to make things difficult. The easy way to do that is through the courts and law system because police carry guns lawfully. The police have the right to do things or also given that they are people, will also not other actions. The courts are suppose to be blind to have equal treatment before law, but when the odds are stacked against you, it is not equal treatment before the law. In the book, whites formed committees to combat giving away power and one of groups is the KKK or Klan. The Klan started as a social club but evolved into something very different, as a social club most whites were members; as it evolved to what it is now, it is composed of a minority of people. When most whites were in the Klan, that included members of the legal department. Why is a case opened? how is it treated? did investigations look for the truth or satisfy a concern? some courts give payoffs to witnesses or it was relatively easy for the court to be corrupt. If a white police officer said it was true, that it was true whether it was plausible or not – in the case involving one of the killings, the person who shot the gun, the police said he was 90 minutes away and they remembered seeing him. Further questioning of when did you see him before or what was special about that occasion? proved the officers lied.

Linking to dividend paying stocks, what is trying to be examined is large profitable companies tend to have more regulations tilted in their favor than do smaller companies. The playing field is not equal, the larger companies tend to say they do not like regulations, but actually love them because it makes the competition spend more money to compete against them. Larger companies help set the standards or how to protect the consumer while protecting themselves. It is very similar to creating a moat, it is always possible to cross the moat, but there are very few bridges and they are protected. As an investor you like see the moat, because the company can deliver consistent profitable results to pay their dividends and reinvest in the business.

There are more questions than answers, till the next time – to raising questions.