
Buffett to Musk: ‘There Are Some Pretty Good Moats Around’ - mcguire
https://www.bloomberg.com/news/articles/2018-05-05/buffett-to-musk-there-are-some-pretty-goods-moats-around
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chollida1
I think they are both talking past each other a bit here, even though all
those comments are intentionally joking.

A moat in business isn't a static thing that you build and then leave forever.

Apple's moat is its supply chain with Tim Cook built out.

Coke's moat is its bottler and distribution chain

Visa's moat is its ubiquity world wide

Google's moat is its search technology and infrastrucutre, both the 85,000
employee's it has and its data centers world wide that any of these engineers
can harness.

None of these companies built that years go and then left it. These companies
spend billions a year on updating their moat's. And if big companies can
innovate, then their "moat's" are one area where they probably have an
innovation advantage on competitors.

I'm with Buffet and Peter Theil on this one, give me a moat any day over a
company that is continuously innovating trying to find a working business plan

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ec109685
Apple’s moat is its ecosystem. There are things uniquely on Apple platforms
like iCloud photos, iMessage and anything bought on iTunes that make it tough
to switch.

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mtrienis
I recently switched from iPhone to a Google Pixel 2 (Android) and I found the
most annoying part was iMessage. Everything else was fairly easy to switch
over. I'm more than happy to never see iTunes again.

~~~
ehsankia
As someone who has never used iMessage, can you expand on what specifically
makes iMessage hard to leave?

Do you lose your past conversations? Do you lose your contacts? Or is it
simply that you lose the extra features and are back to simple base "sms"?

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jsutton
End to end encryption, content rich messages, very fast, and it can be
especially hard to leave if most of your friends that you talk to also have
iMessage.

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ec109685
Typing indicators too.

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vermontdevil
Musk tweeted this later on:

Saying you like “moats” is just a nice way of saying you like oligopolies [1]

[1]
[https://twitter.com/elonmusk/status/992964829282418688](https://twitter.com/elonmusk/status/992964829282418688)

~~~
rdiddly
If anything, it's a nice way of saying you like _monopolies_ , and
particularly, ones that you own. If I owned one, I would like it.

More to the point, saying you like moats, probably just means you own some
moats.

Everybody loves the moat they own and hates the one they don't own. Every CEO
likes the competitive advantage they have, and hates the one their competitor
has. Right now Musk is busy slogging his way across a moat, so I wouldn't
expect positive feelings.

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brownbat
I'm sort of terrified about the opportunity cost to humanity when billionaires
want to settle an idle theory about markets and start devoting cycles to that.

If Buffett knew he was throwing down a gauntlet, I'd hope he would have dared
Elon to do something about malaria rather than candy.

~~~
mlevental
>I'm sort of terrified about the opportunity cost to humanity when
billionaires want to settle an idle theory about markets and start devoting
cycles to that.

you act like tesla is giving away electric cars to underprivileged minorities
and spacex is ferrying school kids to better school districts. it's always all
fun and games and that anyone believes otherwise speaks to efficacy the
marketing/ideology machine

~~~
brownbat
Call me a sucker, but I do think electrification, AI, and space tech have a
nonzero chance of improving humanity's future. Gil Scott Heron's right that
rockets don't put food on the table though. So for more immediate problems,
note that Buffett has also pushed tech billionaires towards charitable causes
in other interactions:

[https://givingpledge.org](https://givingpledge.org)

~~~
mlevental
sucker

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Darthy
According to the latest Tesla owners terms&conditions, owners cannot use a
different ride sharing service than Teslas to send their automated cars off
working, once such a service exists. A classic case of a "moat" if there ever
was one. Musk should put his money where his mouth is and scrap that passage.

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ryanhuff
I don’t get what Buffett is referring to about See’s Candies moat. Besides
being an aging candy brand that is enjoyed by older people, they seem to be
pretty pedestrian.

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tfehring
Here's a video of him talking about See's Candies and moats more generally.

[https://youtu.be/2MHIcabnjrA?t=1955](https://youtu.be/2MHIcabnjrA?t=1955) (In
case the timestamp doesn't work, the relevant part starts at 32:35.)

~~~
ryanhuff
Thanks. I wonder what See's Candies brand reputation trend-line looks like.
While I remember viewing them being premium back in the 1980's, I view others
more favorably today. (Godiva).

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panarky
They're both right.

The ability to innovate faster than your competition is a pretty good moat.

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tptacek
I get that it's material to BRK how long they're going to have Buffett and
Munger, but isn't it a little weird how this article supplies their ages?

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hedora
Tesla’s moats are the supercharger network, and their direct sales and repair
service networks.

