Some curious discussions on moats across twitter last week. Be it whether branding is a moat or whether moats are overrated. I think we have a tendency to find simple answers, to bucket companies into scale, network effect, patent etc. Truth is moats are way more intricate..
..True moats are often a combination of a thousand variables that takes digging across the company. But I've found it often starts with "What is the firm's DNA" aka culture. This extends into how a Co does everything and how it goes about reinforcing it's moats, which in turn..
..supports the branding of the company. It is easy to sell ideas by saying "network effect" but conviction is not built that way. Conviction comes from understanding the intricacies. I'm increasingly unsure if we even should bucket the moats. Step one is to understand why a..
..company does things in a way different from peers, why peers won't or can't copy them. Those are the key questions in my mind, less so whether this 20% roic company fits into any pre-defined buckets
