Buffett on moats in 2000: "If you are evaluating a business, the number one question you want to ask yourself is whether the competitive advantage has been made stronger and more durable. That’s more important than the P&L for a given year."
On Porter's 5 Forces:
"I’ve never really read Porter. I’ve read enough about him to know that we think alike, in a general way. I think he talks about durable or sustainable competitive advantage and that is exactly the way we think"
"The best way to do it is study the people that have achieved that and ask yourself how they did it and why they did it."
"What it is that gives you that moat around the razor blade business? Here’s a worldwide business and yet people don’t go into it.
Why was State Farm successful against people that had lots of capital? We like to ask ourselves questions like that."
"Study things like Mrs. B out at the Nebraska Furniture Mart, who takes $500 and turns it into the largest home furnishing store in the world. There has to be some lessons in things like that. What gives you that kind of a result and that kind of competitive advantage over time?"
"That is the key to investing. If you can spot it when others don’t spot it so well, you will do very well. And we focus on that."
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