What is a Buffett economic moat?
This was selected as Best Answer One of Buffett’s investment criteria is that he wants to see a high return on capital and an “enduring moat” that protects a firm’s profitability from competitors. Such a moat could be having a strong brand, or being low-cost producer — long-term competitive advantages that lead to sustained success, because they create barriers to entry, like a castle moat. But a “moat” might not be enough for Buffett. Even if a company has an “enduring moat,” he might not consider it for investment. For example, if the firm’s industry is changing rapidly, that can quickly erode the “moat”. Buffett has said: “A moat that must be continuously rebuilt will eventually be no moat at all.” For example, GM used to have a strong moat. He enjoyed about 50% market share in North America, and thus had pricing power over the entire industry. During the roll out of new annual models, Ford, Chrysler, and American Motors all waited for GM to set the new model prices, and they were
