One with an excellent and hard working management?
I believe a moat, however wide it may be is going to get breached at a point in the future. OTOH, a hard working management will constantly indulge into R&D and keep generating new moats when the older ones detoriate.
So I will go with a hard working management. Whats your take?
Both are essential… However my arguement is that moat is more easy to identify compared to a hard working management… So I would go with moat. Management is a perspective from the outside and based on the results. No one can predict management behaviour in future.
My point is that I would prefer both. However suppose there is a company x which has a moat and makes good money… you have no clue about the management, other than that there is no legal problems so far.
Based on this info I would buy at the right price. The thing is that once management is well known the price moves too much and goes out of favour. in order to get in early we need to take a leap of faith and trust the management.
Found this topic interesting.
Moat and management.
It’s like betting on dhirubhai ambani or reliance industries in the beginning.
I will bet on management run by people’s like dhirubhai ambani, radhakishan damani, Narayan Murthy , k v kamath, etc., It’s hard to find such people in the beginning of their early career.
It’s their vision and strategy that creates companies with moat.
Well- i thought a moat is created by a hardworking management in the first place…Even if a business has a moat initially, if the management is weak, the moat will swiftly melt due to hard working managements entering the business due to its inherent moat and attractiveness…And will further strengthen the moat…
Off the top of our heads, can we remember the current and past CEOs of J&J US or Pidilite India.
No, but these are hugely performing businesses with a moat.
So moat matters because managerial quality will have less of an impact of a real moat exists.
On the other hand, when a new business, is yet to be proven, a skilled and well known manager is what matters. Examples are in threads above. This is the same reason Mindtree by Ashok Soota was funded soon after it started.