In business, look for economic castles protected by un-breachable moats. One of the best moat is to be a low cost producer of something that’s essential to people. (Moat is a metaphor for superiority a company possesses that make life difficult for their competitors.)

Moat example- Is the product essential to the customer? And does one have pricing power. If you have the power to raise prices without losing business to a competitor, you have a good business. And if you have to pray before asking for the smallest extra price, you have a terrible business.

One should beware businesses prone to rapid & continuous change… A moat that must be continuously rebuilt will eventually be no moat at all.

Every day with every product, the moat widens or narrows. If the moat is widening, profits will rise.

How did Coca-Cola widen their moat? They deepened the thought in people’s minds that Coca-Coke is where happiness is. The brand is associated with people being happy around the world. Happiness & Coke go together.

CEO’s should focus on widening the moat. (Historically, a moat has been the water surrounding a fort or a castle as a protection against invasion. In investing parlance, a moat refers to a company’s ability to have a competitive advantage over its competitors that will help it maintain its market share. It gives long term profit visibility. Great trusted brands have deeper moats. Even patents & high entry barriers result in deeper/ wider moats.)