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I should probably remind myself that looking at history, many companies didn’t have a moat at IPO. Intel didn’t have one (they were in memories). Neither did Peopleware, nor Siebel. (They died.) Moatiness seems to matter more for long term returns, but not for short term ones.

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Cedric Chin

@ejames_c

Sep 17, 2020

Does Snowflake have a benefit or a moat?

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Disagree. In the context of business, moat means a specific thing, which is ‘the ability to resist competitive arbitrage, that in most markets drives returns down to the opportunity cost of capital.’

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and

It’s a fascinating topic that I mostly don’t allow myself to write about. Again, one of the problems of keeping to a specific topic in my blog 🙃

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Cedric Chin

@ejames_c

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@NirantK

This is a really good question! The short answer is 10 years. How you get to that answer is very interesting. Buffett doesn’t bother with years; he just says “sustained pricing power.” Helmers tries to be more precise, he says that a moat should be expressed in the stock price.

6:55 AM · Sep 20, 2020Tweetbot for iΟS

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and

I need to recheck Helmer’s method of getting to this number. It’s a bit hand wavy, and you have to squint to see the assumptions he’s making. Hold on.

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and

It seems I'm misremembering Helmer's argument. He never says 10 years, he just says moats need to be expressed in the stock price, and the stock price captures the expectations on future free cash flow over 'a long period'.