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  1. Investment Moats is a blog that provides tips and insights on stock market investing, savings and retirement planning. Learn how to create a diversified portfolio, manage your risks, and achieve financial freedom.

    • What Is An Economic Moat?
    • Understanding Economic Moats
    • Example of An Economic Moat
    • Creating An Economic Moat
    • The Bottom Line

    The term "economic moat," popularized by Warren Buffett, refers to a business's ability to maintain competitive advantages over its competitors in order to protect its long-term profits and market share. Just like a medieval castle, the moat serves to protect those inside the fortress and their riches from outsiders.

    Remember that a competitive advantage is essentially any factor that allows a company to provide a good or service that is similar to those offered by its competitors and, at the same time, outperformthose competitors in profits. A good example of a competitive advantage would be a low-cost advantage, such as cheap access to raw materials. Very suc...

    Let's return to the example of a low-cost advantage. Suppose you have decided to make your fortune by running a lemonade stand. You realize that if you buy your lemons in bulk once a week instead of every morning, you can reduce your expenses by 30%, allowing you to undercut the prices of competing lemonade stands. Your low prices lead to an increa...

    There are several ways in which a company creates an economic moat that allows it to have a significant advantage over its competitors. Below, we will explore some different ways in which moats are created.

    An economic moat is a metaphor that refers to businesses being able to maintain a competitive advantage over their competitors in order to preserve market share and profits. Any method that a company uses to maintain a competitive edge can be considered an economic moat.

  2. Sep 23, 2024 · The term wide economic moat refers to the competitive advantage that protects a company's place in the market over the long term. Companies with a wide economic moat make it difficult for their...

  3. Feb 10, 2023 · Learn what an economic moat is and how it measures a company's competitive advantage. Find out the five sources of economic moats and how Morningstar assigns ratings based on them.

  4. Learn how to identify and measure economic moats, the sources of durable competitive advantages that protect a company's earnings and value. This guide covers the types, methods, and examples of moats, as well as how they die and how to invest in them.

  5. Apr 6, 2023 · In economic terms, a moat refers to a competitive advantage that a company has over its rivals. This advantage could be in the form of a unique product, a strong brand name, or even exclusive access to a particular resource. A moat helps a company maintain its market share and profitability, even in the face of competition.

  6. Moat investing is based on a simple concept: Invest in companies with sustainable competitive advantages trading at attractive valuations. One of the first steps in implementing this approach is finding companies with a moat.

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