Buffett's metaphor for a company's durable competitive advantage — the structural features that protect its returns on capital from competitive erosion.
Moat sources (Dorsey's systematization): intangible assets (brands, patents, licenses), switching costs, network effects, cost advantages, efficient scale. The key test: can the company earn above-cost-of-capital returns for 10+ years? Buffett's original insight: just as a moat protects a castle, certain structural features protect a company from competitive attack. Moat width and durability matter more than current earnings — the value of a business is the discounted present value of its moat-protected future earnings.
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