At Matthews, we often talk about investing in “quality” companies with “economic moats.” We believe that these are the entities best placed to succeed over the long term in Asia. As Warren Buffett has noted, investors should seek businesses with “economic castles protected by unbreachable moats.” It is these moats that enable a company to survive and thrive as decades pass, creating economic value along the way by generating returns on capital ahead of their cost of capital. But what exactly is an economic moat? How are these derived, and how does one assess them in Asia? This month Kenneth Lowe, CFA, explores.
Tuesday, July 22, 2014
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Date: Tue, 22 Jul 2014 09:15:34 -0700
Subject: July Asia Insight: Anatomy of an Economic Moat