What does economic moat stand for?
competitive advantages
The term economic moat, popularized by Warren Buffett, refers to a business’ ability to maintain competitive advantages over its competitors in order to protect its long-term profits and market share from competing firms.
What is a moat in business terms?
A company’s moat refers to its ability to maintain the competitive advantages that are expected to help it fend off competition and maintain profitability into the future.
Do Moats work in business?
Economic moats are advantages that defend businesses from ceding market share and profits to the competition. Unlike the commonly used term “competitive advantage”, an economic moat is a benefit that is sustainable in the long-term.
What is narrow economic moat?
A narrow economic moat refers to a company with only a slim advantage over its competitors in a given market or industry segment. Narrow moats exist in highly competitive sectors that have low barriers to entry and only a small ability to protect intellectual property.
What is better a wide or narrow economic moat?
Wide economic moats, on the other hand, offer substantial economic benefits and are expected to endure for a prolonged period of time, while narrow moats offer more modest economic benefits and typically last for a shorter period of time.
What does economic moat mean?
An economic moat is a competitive advantage that one company has over other companies in the same industry; this term was coined by Warren Buffett , a renowned investor and executive at Berkshire Hathaway . The wider the moat, the larger and more sustainable the competitive advantage of a firm.
What does moat mean in stocks?
The competitive advantage that one company has over others. Just as a “moat” is a defensive barrier that surrounds a fortified structure, a large moat around a company allows it to charge higher prices and hold a larger market share.
What was the moat used for?
A moat is a body of water around a castle or town to keep people out. At first, moats were simple and used only for protection. Later on, moats became more complicated and were used for show. Moats are deep, wide ditches filled with water.
What is Morningstar economic moat?
Economic Moat is a proprietary Morningstar data point. The idea of an economic moat refers to how likely a company is to keep competitors at bay for an extended period.