Pat Dorsey On The Value Of Moats At The Punch Card Value Investing Conference

Pat Dorsey of Dorsey Asset Management discussed company moats and the value of reinvestment at this year’s Project Punch Card Value Investing Conference. Dorsey started his presentation with a basic question: “What creates a moat?” What creates a moat? The primary test of an economic moat, the presentation went on to explain, is pricing power, which is generally created with intangible assets such as brands, patents or licenses, high switching costs, network effects or cost advantages. Economic moats increase business value by “lengthening the period during which capital can be reinvested at a high incremental return on capital,” Dorsey went…