Economic moats are never stable.
It either gets wider or narrower every day.
More than 90% of stock market returns are generated by companies with widening moats.
Learn how to spot companies with widening moats 👇
It either gets wider or narrower every day.
More than 90% of stock market returns are generated by companies with widening moats.
Learn how to spot companies with widening moats 👇
Network effects increase value to customers when usage increases.
Social networks such as Instagram become sticky when all your friends are on them.
Likewise, Google's search engine becomes better as more data is fed into its algo.
Social networks such as Instagram become sticky when all your friends are on them.
Likewise, Google's search engine becomes better as more data is fed into its algo.
Cost advantage moats with more efficient manufacturing or distribution.
GEICO became one of the largest insurers in the USA with its massive advantage on cost—by cutting out the middlemen.
We want to see cost decline with scale and savings continuously passed to consumers.
GEICO became one of the largest insurers in the USA with its massive advantage on cost—by cutting out the middlemen.
We want to see cost decline with scale and savings continuously passed to consumers.
Switching cost exist when customers trust the product too much to switch providers or it cost too much to migrate.
This is common in software services.
In the banking industry, many are still on legacy infrastructure because the risk of changing software is huge.
This is common in software services.
In the banking industry, many are still on legacy infrastructure because the risk of changing software is huge.
Brand moat = occupying consumers' mind share.
Buffett: "If you gave me $100 billion and said take away the soft drink leadership of $KO in the world, I'd give it back to you and say it can't be done."
Avoid companies chasing ST profits by diluting their brand.
Buffett: "If you gave me $100 billion and said take away the soft drink leadership of $KO in the world, I'd give it back to you and say it can't be done."
Avoid companies chasing ST profits by diluting their brand.
Avoid companies who are mortgaging its moat.
Companies extracting max profit at the expense of consumers are sitting ducks.
Dissatisfied customers will be willing to try alternatives or exit the exploitative r/s when opportunities arise.
E.g. Cable TV cord-cutting.
Companies extracting max profit at the expense of consumers are sitting ducks.
Dissatisfied customers will be willing to try alternatives or exit the exploitative r/s when opportunities arise.
E.g. Cable TV cord-cutting.
Look for companies who strive to delight their customers.
Costco always passes on cost savings to its members.
Apple is always creating better products for its users.
Costco always passes on cost savings to its members.
Apple is always creating better products for its users.
Look at where talents are going—they're the value creators of any company.
Find out which companies are the best to work for.
And avoid those who exploit their employees.
Find out which companies are the best to work for.
And avoid those who exploit their employees.
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