Elon Musk blasted one of Warren Buffett’s primary investing tenets earlier this week when he said during his contentious Tesla TSLA, +3.39%[1] analyst call[2] that “moats are lame” and “if your only defense against invading armies is a moat, you will not last long.”
The classic definition of a moat is, of course, a body of water protecting a castle. In Buffett terms, it’s the advantage certain companies hold over the competition due to by having a powerful brand that creates high barriers to entry.
Buffett obviously doesn’t think moats are lame. After all, he’s made an absolute fortune by investing in them. At his Berkshire Hathaway BRK.A, +1.93%[3] shareholders meeting on Saturday, Buffett said, “Elon may turn things upside down in some areas. I don’t think he’d want to take us on in candy.”
Sounds like a challenge. Musk loves those. So he took to Twitter[4] to respond:
And later, he followed up with this tweet:
Saying you like “moats” is just a nice way of saying you like oligopolies
— Elon Musk (@elonmusk)
As for whether Musk really is going to start making candy, well, you never know. After all, he managed to convince his fans they needed flamethrowers:[6]...
References
- ^ TSLA, +3.39% (www.marketwatch.com)
- ^ analyst call (www.marketwatch.com)
- ^ BRK.A, +1.93% (www.marketwatch.com)
- ^ took to Twitter (twitter.com)
- ^ May 6, 2018 (twitter.com)
- ^ they needed flamethrowers: (www.marketwatch.com)