July 2026 Best Buys

Rumors Of Software’s Death Are Greatly Exaggerated

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Tom Carter’s tombstone has five words on it: “Here lies a stubborn Texan.”

Tom’s heart gave out in Gun Barrel, Texas, after he lost his ranch to a giant, very angry woman named Ma Bell, otherwise known as AT&T.

It all started because he wanted to talk on the phone while on horseback... in 1959, long before mobile phones were a twinkle in Motorola’s eye.

Tom – a rancher who spent long days in the saddle on his Dallas farm – figured out a way to hook up a two-way radio to his land-line telephone back at the house. When the phone rang, he’d get a radio signal. And then he’d patch the call through without having to dismount. Pleased with his workaround, he dubbed the invention the “Carterfone” and launched a sales campaign.

He hadn’t reckoned with Ma Bell.

AT&T was the mother of all telephone networks: founded in 1885 by Alexander Graham Bell, the inventor of the telephone. By Tom Carter’s day, it was the world’s largest company with a monopoly on America’s telephone industry. And Ma Bell did not like competition.

Uncle Sam and Ma Bell were tight. The government enforced AT&T’s price demands – known as tariffs – and prohibited upstart telephone companies from horning in on big mama’s territory, which she defended viciously. Not only could you not have a non-Bell telephone, you couldn’t attach anything to your telephone that didn’t come from AT&T.

Ma had already lost once – to a funny little company called Hush-A-Phone, which made a plastic voice-muffling device to prevent eavesdropping. In 1956, the Supreme Court had ruled that it was fine to connect a mechanical device to a telephone handset, as long as it wasn’t damaging the telephone line.

But an electronic device like the Carterfone – to AT&T’s shark lawyers – was a hell of a lot bigger threat.

Ma Bell sued Tom Carter. Tom – stubborn Texan that he was – didn’t back down. The case finally went to the Supreme Court in 1968... where, unexpectedly, Tom won. The Court expanded on the Hush-a-Phone ruling: You could hook all manner of things – mechanical or electronic – up to a pre-existing communications network, as long as they didn’t harm the network.

Hush-A-Phone v. United States saved Tom’s bacon, though, ultimately, not his farm...

Despite the ruling, vindictive Ma Bell pressured Carterfone out of business and eventually drove Tom into early retirement – and eventually his grave – in Gun Barrel.

Tom did get some satisfaction out of his victory – he told The New York Times shortly before his death.

We pinned their ears back. We made fools of them.

He also unwittingly started the computerized stock-terminal industry.

Without the Carterfone ruling, we wouldn’t have trading terminals today...

Stock Trading Terminals Proliferate

Three years after Carterfone, physics whiz and former missile designer Simon Ramo ginned up one of the first computerized stock-quote screens on the market... an industry first, after half a century of ticker tape.

Ramo’s terminal (called the Telequote) was primitive: a tiny cathode ray screen that displayed stock prices in real-time. In order to deliver that data to brokers, it used the Western Union telegraph network – another communications monopoly regulated by the Federal Communications Commission (“FCC”).

Western Union was just as protective of its territory as AT&T, and didn’t take kindly to stock terminals hooking into its telegraph lines. It refused to lease wires to Ramo’s company, Bunker Ramo... triggering another Supreme Court showdown that ultimately ended in Ramo’s favor.

Trotting out the Hush-a-Phone and Carterfone precedents, the Court handed down a landmark 1971 decision known as Computer I. Bunker Ramo – and anyone else who wanted to – could attach their new-fangled computers to existing wire networks, as long as those computers didn’t damage the wires.

Computer I kicked off an instant, intense arms race between a rogue’s gallery of stock quote terminal providers...

Within a couple of years, Bunker Ramo was not the only game in town. Telerate, Quotron, and Ultronics quickly established themselves as contenders. The duds flamed out, like the short-lived Viewtron, which sold in retail stores for $600 and allowed you to check your stocks at home for an eye-watering fee of $1 a minute.

As the technology improved, the playing field narrowed. Telerate got bought out by bond broker firm Cantor Fitzgerald, which used the service to broadcast up-to-the-minute U.S. Treasuries prices. Quotron, acquired by banking giant Citicorp, focused on stock market data, while Bunker Ramo’s original Telequote ultimately helped power the Nasdaq exchange. By the late 1980s, there were some 426,000 stock monitors active worldwide – all focusing on different specialties and areas of the market.

You may be wondering why you’ve never heard of most of these companies.

That would be because of the Bloomberg Effect.

The All-Powerful Bloomberg Effect

The now-ubiquitous Bloomberg Terminal – just another small competitor when it hit the market in 1982 – offered something fundamentally different than Quotron or Telerate. Where the other companies carefully controlled what information you could see – and showed you slim, pre-selected slices of market data – Bloomberg’s brightly color-coded terminal gave you everything: comprehensive stock and bond data, news and analytics, and an exclusive social network for brokers to communicate with each other.

More insidiously, though, Bloomberg didn’t just feed you information. It offered an open platform where you could build your own programs and write your own tools – in the process, thoroughly enmeshing your company with Bloomberg’s system. Excel models, portfolio tracking, trading protocols: once you’ve customized the terminal to your liking, it’s almost impossible to rip yourself away from it. The more value you build, the more stuck you get.

In 1982, company founder – and later mayor of New York City – Michael Bloomberg had cut a deal to sell 20 terminals and a 30% equity stake to Merrill Lynch, which ditched its current provider, Quotron, in order to get on board...

From then on it was a slow downhill slide for Telerate, Quotron, and the other terminal providers, who shrank, imploded, and got absorbed into the bellies of Reuters and Dow Jones. By 2012, Bloomberg had surpassed Reuters (the last competitor standing) to become the highest-earning terminal in the world.

Today, the $22 billion Bloomberg runs 350,000 active terminals along with a media and publishing empire, while Michael himself has scored billionaire status, become a finance celebrity, and served three terms as New York City mayor.

Artificial intelligence (“AI”) will never replace Bloomberg – the terminal. It can’t. In an interview earlier this year, Bloomberg’s CTO Shawn Edwards commented on vibe coding – getting AI to do the programming – versus humans.

Vibe coding is great for certain things. But you don’t vibe code your way through a mission-critical decision-making system.

The Bloomberg Effect means that, realistically, nothing will replace the Bloomberg Terminal.

Here at Porter & Co., we’ve identified a group of “Bloomberg Effect” stocks that we believe are at virtually zero risk of AI disruption. They have wide, structural moats around their businesses protected by things like government regulations, network effects, and high switching costs. Plus, they’re best-in-class business models that continue posting new record highs in sales, earnings, and cash flow.

Normally, these stocks trade at significant premiums over the market. But over the last six to 12 months, their share prices have been crushed on misplaced fears of AI disruption – creating some of the biggest opportunities in the market today.

Today’s Best Buy is one of these opportunities...

It’s a software we use ourselves at Porter & Co. Our workflow is so enmeshed with it that ripping it out is too painful to think about. Asked if he’d consider switching, one of our team leads responded:

Not unless you give me some cyanide to swallow down the aspirin.

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