Kinder Morgan Inc (KMI), Pfizer Inc. (PFE): Want to Be a Great Investor? Maybe You Should Have Been an English Major

Kinder Morgan Inc (NYSE:KMI), the third-largest energy company in America, owns an extensive network of approximately 80,000 miles of pipeline and 180 terminals. This represents a significant investment in capital and labor that would be very difficult for an upstart competitor to match. Furthermore, government approval for new pipelines is stringent and need-based, which further insulates the incumbent. The U.S. is expected to be the world’s largest energy producer by 2020 – with the largest natural gas network in the U.S., Kinder Morgan Inc (NYSE:KMI) is well-placed for the natural gas boom. As production rises, the ability to transport resources will become increasingly valuable. Applying the logic identified above, it can be argued that Kinder Morgan Inc (NYSE:KMI) has built a strong “economic moat” through both property rights and a portfolio heavy with fixed-fee, long-term contracts that will generate cash regardless of pipeline use. Using metaphorical thinking to evaluate companies in terms of sustainable competitive advantages can help identify businesses like Kinder Morgan Inc (NYSE:KMI) and add a qualitative assessment to growth estimates.

Like any skill, metaphorical thinking can be developed with practice. While it may be too late to switch your major, it is worth keeping in mind that investing is not just about calculations and charts. Learning how to think, make connections, and consistently apply logical thought have far-reaching benefits, and not just for your portfolio.

The article Want to Be a Great Investor? Maybe You Should Have Been an English Major originally appeared on Fool.com is written by Jake Keator.

Jake Keator is not an English major and has no position in any stocks mentioned. The Motley Fool recommends Kinder Morgan, Morningstar, and Walt Disney (NYSE:DIS). The Motley Fool owns shares of Kinder Morgan and Walt Disney.

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