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A moat is not just an advantage. It is a durable advantage. Most advantages disappear in five years. Moats last decades.
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I built the moat framework at Morningstar. Then I left to invest with it. Building the theory was easy. Living it is harder.
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A cheap stock without a moat is a value trap. An expensive stock with a wide moat is often the better buy.
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There are four sources of moats: network effects, switching costs, intangible assets, and cost advantages. That is the entire framework.
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Most investors overweight valuation and underweight quality. A great business at a fair price beats a mediocre business at a great price every time.