Mark Sellers: technology is not an investor's economic moat

==Economic moat==: a business' ability to maintain competitive advantages over its competitors in order to protect its long-term profits and market share

Those who are NOT sources of an economic moat

• technology. technology will always be duplicated
• reading a lot. ==reading only makes people keep up.== Everyone reads a lot in this business. Some read more than others, but it does not necessarily make you more competitive.
• an MBA from a top school or any other degrees or designations. This often gives people a big paycheck even though it is the antithesis of what a great investor does.
• Experience. In order to play the game, some level of experience is necessary, but at some point, it doesn’t help anymore.

Those who are sources of an economic moat

1. economies of scale and scope. e.g. Wal-Mart, Home Depot, Lowe’s.
2. network effect. e.g. eBay, Mastercard.
3. intellectual property rights, e.g. patents, trademarks.
4. high customer switching costs. Paychex and Microsoft.

Jerry Neumann: A taxonomy of moats.