Asking ourselves questions in a simple framework based on Michael Porter’s five competitive forces allows us to understand what makes Warren Buffett’s moats work and where they are likely to break down.
Management that unfailingly thinks and behaves like an owner of the business and has the courage and candor to discuss failures openly in reports to shareholders.
If the job has been correctly done when a common stock is purchased, the time to sell it is – almost never.
Ironically, the four faces of risk reverse actual risk. Risk is perceived to be highest in bear markets; moderate in sideways markets; increasingly lower in bull markets; and, more or less ignored, in bubbles.
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