georgeclerk
Summary
- ‘Competitive moat’ refers to a business’s ability to maintain an economic advantage over competitors, and we think Amazon has the largest moat in Big Tech.
- Amazon’s core physical marketplace and logistics network, along with additional revenue streams, contribute to its near-impregnable financial results.
- While there are risks, like the extended multiple, Amazon’s strong business model and potential for double-digit long-term growth make it a compelling investment option.
- We rate AMZN a ‘Buy’.
If you ask Google (GOOG) the definition of a ‘Competitive Moat‘, it quickly comes up with the following answer:
A competitive moat, also known as an economic moat, is a business’s ability to maintain a competitive advantage over its competitors. The term comes from the moats that surrounded medieval castles, which acted as a barrier to protect the castle from outside invaders.
While the concept was initially popularized by Warren Buffett, the term has seeped its way into all corners of investment analysis, especially when it comes to considering a company’s ‘durable’ advantage in the marketplace.
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