Buffett looks for companies with a strong economic moat from "summary" of The Warren Buffett Portfolio by Robert G. Hagstrom
Warren Buffett has a unique approach to investing in companies. He seeks out businesses that have a competitive advantage, or what he calls a "strong economic moat." This concept is central to his investment strategy. When Buffett talks about a strong economic moat, he is referring to the competitive advantages that allow a company to maintain its profitability and fend off competition. These advantages come in various forms, such as brand recognition, economies of scale, patents, regulatory barriers, or high switching costs for customers. Companies with a strong economic moat are able to generate high returns on capital and sustain those returns over the long term. This is appealing to Buffett because it indicates that the company has a durable competitive advantage that will protect its profits from erosion by competitors. Buffett believes that a strong economic moat is a key indicator of a company's ability to generate wealth for its shareholders. By investing in companies with a competitive advantage, he is able to benefit from their long-term success and growth. This is why he places such a high value on businesses with a strong economic moat.- Buffett is looking for companies that have built a fortress around their business, protecting it from competition and allowing it to thrive in the long run. This focus on economic moats has served Buffett well over his long investing career, and it continues to be a cornerstone of his investment philosophy.
