When I first heard about the term economic moats, my mind wandered off to the Akira Kurosawa movie classic, Seven Samurai.
The movie tells the story of a group of farmers in a village that hire seven rōnin (samurais without masters) to fight off bandits that are trying to steal their precious crops.
In the pivotal battle, the villagers and the rōnin build a moat and wooden fence to defend against the bandits.
What does this have to do with investing? I’m glad you asked.
What is an Economic Moat?The concept of economic moats came from Warren Buffett, who coined the term in an interview with Fortune magazine in 1999:
“The key to investing is . . . determining the competitive advantage of any given company and, above all, the durability of that advantage. The products or services that have wide, sustainable
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