360 - From the Vault: Moat and Processes
b'In thinking about the process of finding wonderful companies at attractive prices, it helps to think of what I call the Four Ms: meaning, management, margin of safety, and moat.\\xa0\\n\\xa0\\nThis podcast is focusing on moat.\\n\\xa0\\nMost people know a moat to be the water around a castle but in investing terms, a moat is the durable competitive advantage that a company has that protects it from being attacked by competitors.\\n\\xa0\\nA moat is what makes a company predictable and allows us to put a value on the business. Charlie Munger said that \\u201cCoca-Cola is the perfect business because it has this gigantic durable competitive advantage, or moat, which gives it predictable cash flow.\\u201d\\xa0\\n\\xa0\\nThis allows us to figure out what the future cash flow will be and value the company today, so we know whether we can buy it on sale or not.\\n\\xa0\\nFinding a business with a wide moat is key to finding a successful business to own, because a business with a wide moat is much more predictable for the next 20 years than a business with no moat.\\n\\xa0\\nThe idea of the moat is really simple. If an industry looks as if it might be very easy to get into, there probably isn\\u2019t a moat. On the other hand, if an industry looks as though it might be really hard to get into and be successful, you\\u2019ll probably find some wide-moat businesses.\\n\\xa0\\nIn today\\u2019s podcast, Phil and Danielle discuss moat and value, and the processes in which they pick stocks with confidence.\\n\\xa0\\nLearn more about moat and the other three Ms of investing with this free guide that I\\u2019ve created for you: https://bit.ly/3MrOtpE\\xa0\\n\\xa0\\n\\nTopics discussed in this podcast:\\n\\nMoats\\n\\nValue\\n\\nPicking Stocks with Confidence\\n\\nFor show notes and more information visit www.investedpodcast.com\\nLearn more about your ad choices. Visit megaphone.fm/adchoices'