How to identify economic moats

Ancient castles had deep, wide ditches filled with water around them called a moat, which protected them from attacks. Similarly, successful companies build 'economic moats', in simpler words - competitive advantage. These moats can be either qualitative or quantitative, and they protect companies from their competitors. Some common ones are proprietary technology, patents, intangible assets, cost advantages, efficient scale, customer switching costs, network effects, etc. The telltale signs of moat Who wouldn't want to invest in companies that have an advantage over their peers? Hence, investors are always on the lookout for companies with a moat. So the next question is how to identify companies with moats. Experts like Pat Dorsey of Morningstar believe moats are often evident

This article was originally published on May 23, 2023.