As a real estate developer for over twenty years, I was always fascinated with creating value and the concept of owning irreplaceable property.
One of the ways that I would look to create a competitive advantage when scouting for good real estate was to find land with the very best fundamentals, such as strong traffic counts, good access, and exceptional visibility.
Similarly, as a stock picker and CEO at Wide Moat Research, I am constantly looking for companies with the very best fundamentals, and in real estate terms, the businesses with the widest moats.
A moat is a term that Warren Buffett uses to highlight the competitive advantage of the company. Whenever a particular company has strong fundamentals – a strong balance sheet and steady dividend growth – the competitive advantages (or moat) is the widest.
The moat is critical because it protects a company from losing market share easily which will erode its earnings power over time. This is important for investors because a company with superior advantages can survive over longer periods of time. Warren Buffett famously explained, “In business, I look for economic castles protected by unreachable moats.”
I created Wide Moat Research to help educate and inform small and large investors in a range of strategies including dividend investing, value investing, fixed income, and income-generating options trading services. Within each of these categories, our team is hard at work to uncover the most profitable ideas, with an emphasis on sustainable competitive advantages.
So you can see that our name, “Wide Moat”, is also the essence of our research that drives our risk analysis, decision-making, and ultimately our portfolio performance. As Warren Buffett explained,
“We’re trying to find a business with a wide and long-lasting moat around it, surround — protecting a terrific economic castle with an honest lord in charge of the castle.”