Investing term
What is Economic moat?
A durable advantage that lets a business defend high returns against competitors over time.
An economic moat is a durable advantage that protects a company's profits from competitors — a powerful brand, network effects, high switching costs, patents, or unbeatable scale. The wider the moat, the longer a business can earn high returns before rivals erode them. Identifying moats is central to long-term investing, because they're what let a great company stay great.
For example
A payments network where every new user makes the service more useful has a network-effect moat — rivals struggle to lure anyone away.
Economic moat is taught hands-on in Stage 15 — Valuation for Investors.
See the lesson →