Moats Vs Hardworking Management

Which company are you going to choose to invest?

  • One with an excellent moat
  • 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?

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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.

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Just for the sake of simplicity,lets assume that we have identified such a management and its a guarantee that it will behave similarly in the future as it did in the past.

You know,people rarely change. You can never change someone easily. Especially the ones who have tasted success in the past and hence, knows the recipe to be successful again.

What will be your take this time?

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.

Obvious choice is moat. Reason is an average manager can give good return with wonderful business or most. But a wonderful manager will struggle to generate good returns with average business.

How much likely that he wont try to improve the"average business"?

@Donald and @hitesh2710 . Requesting both of you to contribute your 2 cents here.

You can think of 2 similar startup businesses : one started by Bill Gates and another by me.The future of those 2 businesses seem to be obvious!

Example is Microsoft, bought Nokia and failed to run it properly but still Microsoft generates good returns.

How about examples like page industries and Pi Industries? They are constantly launching newer products(with moats) in the market…

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…


Thier is a Warren Buffet Quote , I read long back.

“When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.”

So , the Moat seems to be more important , because if the business is not good ,Management may also struggle.

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.