NEW YORK ( TheStreet) -- Warren Buffett once said, "The key to investing is not assessing how much an industry is going to affect society, or how much it will grow but, rather, determining the competitive advantage of any given company and how long it can maintain that advantage.In other words, Buffett believes in investing in monopolies. While these are hard to come by, there are some companies, such as Sirius XM (XM), the only satellite radio company in the U.S., that come pretty darn close.
The Effective DeliveryThis is where streaming media giant Netflix (NFLX - Get Report) finds itself. In an odd sort of way, the company is both a titan and an underdog at the same time, which makes it a challenge in determining how to root for it. Netflix reminds me a lot of Research in Motion (RIMM), except with better management.
While RIM essentially took Palm by the hand and escorted it out of business. Netflix took a more distant approach and wiped out Blockbuster with a postage stamp and its red envelopes. The company pioneered an industry that is now changing. Netflix was able to impose its will and capture the imagination of movie lovers everywhere to the point where it became an embarrassment to be seen Friday nights at your local Blockbuster or Movie Gallery. It was successful in changing the game by creating a "room service industry" for movies.