Economic Moats: Why one must consider them when picking stocks


Dec 26, 22 | by: Sanjeev Anand

Moats –a word that invokes images of castles, villages, and towns with large ditches around them filled with water or other defenses to keep invaders out. Archeologists found the earliest evidence of moats in the ruins of Babylon and relics from Egypt, Assyria, and others. Later, these moats became the first line of defense for castles, fortifications, villages, and more.

Considering moats are barriers, in business terms, an economic moat safeguards a company from its competitors. Warren Buffet coined the term economic moat in 1999 and popularised it. He often says, “In business, I look for economic castles protected by un-breachable moats.”


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