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  • Dan WilsonDan Wilson Member
    Post count: 15

    Hi All,

    What is your opinion on MOATs?

    Does it have to be something as precise as a brand name, secret recipe or patent or can the management be a moat?

    For example:

    Lets say a business has 0 debt, cash on the books and a higher earnings % compared to its industry competitors would this not be considered a ‘short term’ moat as well?

    I know these metrics can change and the business could become unprofitable or start to take on excessive debt, but this could be seen in the quarterly reports and give the investor time to get out of that position.

    All feedback is appreciated.

    Thanks,

    Dan

    1 user liked this post.
    Sergio FelerSergio Feler Senior Member
    Post count: 30

    Hi Dan,

    I understand 0 debt, cash on the books and a higher earnings % compared to its industry competitors are not concepts classified as Moats.

    The following concepts are moats:

    Switching Cost, Brands, Patents, Network effects and Cost advantages (which are not higher earnings).

    Regards,
    Sergio

    1 user liked this post.
    Rajiv Renganathan