What is a moat?
In Buffett's investment, the moat actually refers to the core competitiveness of the invested enterprise in a certain aspect. The moat specifically includes the following points.
1, monopoly
Buffett is particularly optimistic about monopoly enterprises. Compared with other enterprises, the competitiveness of monopoly enterprises in a certain industry is unparalleled. At the same time, they have strong advantages in scale, price and pricing, and can obtain higher and more lasting profit growth through monopoly.
2. Brand advantage
The scale of an enterprise can only be achieved by increasing investment, but it takes several generations for an enterprise to establish its brand advantage, which is also the main reason why Buffett is optimistic about Coca-Cola for a long time. He said that if you exchange 1000 billion dollars for Coca-Cola, you will definitely not change it. Brand advantage is a long-term precipitation and accumulation of an enterprise, which is difficult to imitate and surpass.
3. Concessions
In fact, franchising has excluded other competitors. The market of such enterprises is relatively stable, the net profit grows steadily, and the product pricing ability is strong.
4. Customer loyalty
Buffett pays more attention to customer loyalty than the scale effect of the enterprise. Enterprises with high loyalty usually have a unique reputation advantage, which is an inexhaustible motive force for the long-term development of enterprises.
Of course, Buffett's moat also includes the technological advantages and patents of enterprises, which are equally important. In short, investment is to find enterprises with core competitiveness and hold them for a long time.
(This information is for reference only and does not constitute investment advice. Carefully evaluate when investing. )