MOATS: NOT JUST FOR CASTLES
Published on Mar 15, 2018
A slide deck used to present the research of John Volker and Micheal Phillips relative to financial moats and entrepreneurial firms.
MORE DECKS TO EXPLORE
PRESENTATION OUTLINE
Conceived by Warren Buffet
Warren Buffet first used the concept of moats in his letters to investors.
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Warren Says
- Investment Targets
- Economic Castles
- Unbreachable Moats
Buffet says that his investment targets should be economic castles surrounded by unbreachable moats.
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Developed by Morningstar
Morningstar has adopted the use of moats in its ratings and valuations.
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Morningstar
- Firm must not just build a castle.
- They must also build a protective moat.
- Moat reflects a sustainable competative advantage.
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The Five Forces
- Threat of New Entry
- Buyer Power
- Threat of Substitution
- Supplier Power
- Competitive Rivelry
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Porter's Model Doesn't Recognize Sustainable Competitive Advantage.
Sources of Moats
- Network
- Switching Cost
- Cost Advantage
- *Intangible Assets*
- Efficiencies of Scale
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Entrepreneurs & Moats
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Entrepreneurial Moats
- Network (Maybe)
- Switching Cost (No)
- Cost Advantage (No)
- Efficiencies (No)
- Intangible Assets (YES)
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Human Capital: Investing in People Through Education.
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Consequences
- Recognize Opportunities
- Create, Capture, & Deliver Value
- Maximize Creativity
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Social Capital: Knowing What is Possible--Nurture.
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Consequences
- Extracting Knowledge
- Extracting Benefits
- Derived from Existing Social Structures
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Human & Social Capital Create Entrepreneurial Moats
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"Sustainable" Value Proposition Design: Human & Social Capital are the Keys
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Thank You!
Comments are Encouraged
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