By
Borsgade
During his recent presentation at the Value Investor Conference, Rob Vinall explored the concept of economic moats in both static and dynamic economies.
Historically, a wide moat provided significant advantages, ensuring stability and wealth, much like the landowners of 300 years ago. However, in today’s rapidly evolving economy, a wide moat can become a liability, fostering complacency and impeding swift adaptation to competitive threats. Rob highlighted Google as an example of a company that might be hindered by its wide moat, potentially becoming overextended and struggling to navigate the transition to AI.
And I would argue in a fast changing economy it’s probably a disadvantage to have a moat because it’s going to make you fat and lazy. And it’s going to slow you down when it comes to reacting to competitive threats.
So in a more of a dynamic economy you really want companies which have great execution and you should be actually actively fearful if the moat is too wide because that’s probably going to slow them down.
And the company that really springs to mind today a little bit is maybe Google as well because they obviously… it’s become this enormous very over bloated complacent organization facing an existential threat, perhaps also opportunity in the AI transition.
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