Buffett believes in investing in companies with a moat from "summary" of The Warren Buffett Portfolio by Robert G. Hagstrom
Warren Buffett is known for his investment strategy of focusing on companies with a competitive advantage, or what he refers to as a "moat". A moat, in this context, is a metaphorical barrier that protects a company from competition and allows it to maintain its profitability over the long term. Buffett believes that a company with a strong moat is able to fend off competitors and generate consistent returns for its shareholders. This competitive advantage can come in many forms, such as brand loyalty, economies of scale, or proprietary technology. By investing in companies with a moat, Buffett is essentially looking for businesses that have a sustainable competitive advantage that will allow them to continue to thrive in the face of competition. This focus on long-term sustainability sets Buffett apart from many other investors, who may be more focused on short-term gains. Buffett's emphasis on investing in companies with a moat reflects his belief in the power of compounding returns over time. By investing in companies that have a durable competitive advantage, Buffett is able to generate strong returns for his shareholders over the long term. In summary, Buffett's strategy of investing in companies with a moat is based on the idea that a sustainable competitive advantage is key to long-term success in the stock market. By focusing on businesses with a strong moat, Buffett is able to generate consistent returns for his shareholders and outperform the market over time.
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