Economic Moat

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What is 'Economic Moat'

Economic moat is the competitive advantage that one company has over other companies in the same industry. This term was coined by renowned investor Warren Buffett.

BREAKING DOWN 'Economic Moat'

The wider the moat, the larger and more sustainable the competitive advantage. By having a well-known brand name, pricing power and a large portion of market demand, a company with a wide moat possesses characteristics that act as barriers against other companies wanting to enter into the industry.

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RELATED FAQS
  1. What is an economic moat?

    The term economic moat, coined and popularized by Warren Buffett, refers to a business' ability to maintain competitive advantages ... Read Answer >>
  2. Why does Warren Buffett largely avoid investing in the technology sector?

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  3. Why did Warren Buffett invest heavily in Coca-Cola (KO) in the late 1980s?

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  6. How do I determine my company's competitive advantage?

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