Why Do “Monopolies” Deliver Outsized Returns?

A recent viral post claims the “simplest investing trick” is to buy monopolies. Highlighting companies like ASML, Amazon, Mastercard, Fortinet, Apple, Moody’s, and S&P, the table summarizes the 10-year ROI for a handful of global giants dominating their respective niches. Some numbers are staggering—Fortinet, for instance, delivered a 1,159% return, while Amazon posted nearly 900%.

But what is really behind these numbers? Is “buying monopolies” as simple—and as safe—as it sounds? And do the current leaders possess true monopoly power, or is the market much more dynamic and nuanced? In this article, we’ll break down the data, look at each sector’s strategic reality, analyze the risks, and ask whether monopoly-style dominance guarantees future outperformance.

10-Year ROI and the “Monopoly List”

The post ranks companies by their sector, listing their 10-year ROI as follows:

ASML (Chipmaking Equipment Supplier): 620%

Amazon (E-Commerce): 892%

Mastercard (Digital Payments Network): 520%

Fortinet (Firewalls): 1,159%

VeriSign (Internet Infrastructure): 353%

Apple (iOS): 535%

Moody’s (Credit Ratings): 342%

CME Group (Derivatives Exchange Operator): 183%

Philip Morris (Tobacco): 136%

S&P Global (Credit Ratings, Data): 390%

For context, the S&P 500 returned about 230% in the same period, including dividends. Most companies here have outperformed the broad market by a wide margin.

Monopolistic Power: What Does It Really Mean?

Each of these firms is described as a “monopoly” in their area—but the degree of dominance varies dramatically:

True Monopoly: ASML is arguably the closest example—virtually the sole supplier of extreme ultraviolet (EUV) lithography machines critical to advanced chip manufacturing. Their technology is essential to TSMC, Samsung, and Intel, creating a true bottleneck.

Oligopoly/Cartel: Mastercard (along with Visa), S&P, and Moody’s operate in tightly held duopolies or oligopolies, with high regulatory and network barriers protecting profits.

Dominant Platform: Amazon (e-commerce) and Apple (iOS) control massive platforms, but face robust competitors—Walmart, Alibaba, Google Android, and emerging challengers.

Specialized Network: Fortinet dominates certain enterprise security niches, but cyber markets remain fragmented and competitive. VeriSign’s internet root authority is a near-monopoly, but its range of services is narrower.

Legacy Moats: Tobacco (Philip Morris), credit ratings, and derivatives exchanges benefit from regulatory inertia, high switching costs, and slow-moving industry change.

Sector Analysis: Why Some Monopolies Succeed More Than Others

Chipmaking Equipment (ASML): The lifeblood of global tech. With EUV technology and decades of R&D, ASML’s lead is measured in years. Demand is reinforced by the rise of AI, high-performance computing, and national security priorities.

E-Commerce (Amazon): Network effects, logistics infrastructure, and scale drive Amazon’s moat. Still, regulatory scrutiny and labor costs are rising, and international competition remains fierce.

Digital Payments (Mastercard): Two networks (Mastercard and Visa) process most global transactions, creating a self-reinforcing ecosystem. However, fintech innovation and regulation could disrupt their fee structure.

Firewalls (Fortinet): Cybersecurity is growing rapidly, but product cycles are fast and competitors are nimble. Fortinet’s results reflect excellence in sales execution and product innovation, not a static monopoly.

Internet Infrastructure (VeriSign): As the exclusive manager of .com and .net domains, VeriSign benefits from a stable, annuity-like revenue stream, regulated but virtually untouchable.

iOS (Apple): Apple’s grip on its app ecosystem is lucrative, but global regulators are increasingly targeting platform fees and competition rules.

Credit Ratings/Data (Moody’s, S&P): Deeply embedded in global finance. Regulatory requirements make it hard for new entrants to challenge their dominance.

Derivatives Exchange (CME Group): Trading infrastructure with high fixed costs and global liquidity, but new entrants—like crypto exchanges—show how quickly the landscape can change.

Tobacco (Philip Morris): Declining volumes in developed markets, but a cash-generating business with legal and societal barriers to competition.

Contradictions: High Returns, but at What Risk?

While these companies have delivered stunning returns, investors should consider the unique risks embedded in “monopoly-like” businesses:

Regulatory Risk: Dominant firms attract global scrutiny—antitrust lawsuits, new regulations (especially in tech, payments, and credit data), and demands to break up or limit fees.

Innovation Risk: Tech changes fast. Even the most entrenched firms can be disrupted by new technology (as seen in telecom, payments, and digital media).

Social/Political Backlash: Tobacco faces ongoing litigation and public health campaigns. Tech giants are under fire for privacy, labor, and competition issues.

Globalization: Geographic expansion exposes companies to new competitors, changing consumer tastes, and political risks.

Monopoly Isn’t Forever: Survivorship Bias and Changing Moats

Investors should remember that every era has its “untouchables”—railroads, telephony, Kodak, IBM, and even GE were once seen as unassailable. The modern “monopolies” may have deep moats now, but the very forces that created their dominance—technology, regulation, global capital—can also unseat them.

Furthermore, some “monopolies” are the result of network effects (Apple, Mastercard), others are regulatory constructs (Moody’s, S&P), and some—like ASML—are simply the winner of an incredibly complex technical race.

Strategic View: Should You Really Just “Buy Monopolies”?

The data makes a strong case for favoring market leaders—especially those with structural advantages, high margins, and reinvestment capacity. But a few points must be considered:

Diversification is critical: Even dominant firms can stumble. Owning a basket reduces company-specific risk.

Don’t ignore valuation: High returns attract high multiples. Overpaying for “safety” can backfire in downturns.

Watch the moat: Continuous innovation and adaptation are required. Yesterday’s leader can quickly become today’s laggard.

Consider ESG and regulatory headwinds: Especially for tobacco, Big Tech, and credit rating agencies.