A good business is like a strong castle.
As Warren Buffett once told his shareholders, “I don’t want an easy business for competitors. I want a business with a moat around it. I want a very valuable castle in the middle and then I want a duke who is in charge of that castle to be very honest and hardworking and able. Then I want a moat around that castle. The moat can be various things: The moat around our auto insurance business, GEICO, is low cost.”
Every business has a moat, but how wide is it? Is there water in it? Is the moat shrinking or expanding?
Moats may be evaluated quantitatively or qualitatively, so we will need to employ a variety of methods. Along the way, we will learn all we can from Fisher, Buffett, and Graham, and hopefully, make some wise investments too.