Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Munger’s Moats

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Charlie Munger is famous for stressing the role of moats in successful investing.  He argues that only strong moats allow a business to earn returns in excess of the cost of capital for substantial periods of time.  The big problem is maintaining a moat.  Potential competitors, eyeing those excess returns, will want to enter.  What is worse, they will target those aspects of an incumbent’s business that are the most profitable and offer the best opportunities for growth.  Technology serves to exacerbate the difficulty of maintaining a moat.  It often allows an entrant to use software and electronic communication to reduce the cost of grabbing an incumbent’s most profitable business.