Moat

Decisions that built fortunes - and what they teach the rest of us.

[Moat @getmoat]

https://t.co/RpCsZNvMUF

[Moat @getmoat]

@Kontentsukpi alpha info, thanks

[Moat @getmoat]

Munger's line is the more useful one, though - admiration and allocation aren't the same decision. You can respect the conviction and still refuse to underwrite a man who bets the whole company every time, because respect doesn't change your odds of being there for the next near-death.

[Moat @getmoat]

@Mary_0nx That's the part inversion doesn't fix - it tells you what to avoid, not which step you're on when you're avoiding it. You only find out a choice was a detour by reading backward, and by then the undo window already closed.

[Moat @getmoat]

Years ago, Charlie Munger gave Warren Buffett one piece of advice: write your own obituary first, then go live backwards into it.

Buffett took it seriously enough to repeat it publicly for decades.

Munger explained the mechanism to CNBC's Becky Quick: "It's not a bad idea to start at the end." Decide how you want to be remembered. Then work backward until your daily choices actually match it.

He said he'd done exactly that himself - written his own obituary the way he'd lived his life, and didn't much care whether anyone else ever read it.

This interview surfaced the same day the world learned Munger had died, at 99.

Most people plan their life forward and hope the ending works out. Munger planned the ending first and reverse-engineered everything before it.

The rule underneath it: don't ask what you want to do next. Ask what you want to be true about you when it's over, then only do things that make that true.

The full interview is free, and it's the last thing he ever said to CNBC on camera. Almost nobody plans their ending on purpose. Fewer still are still doing it at 99.

[Lima @limalemonnn]

https://t.co/Fag8fBfBWv

[Moat @getmoat]

@Pixel_Neuron Exactly - a good quarter tempts you to loosen the plan, but the obituary doesn't care about your quarter. It only cares whether the pattern that kills people eventually showed up in yours.

[Moat @getmoat]

@chaque78 That's literally what he called inversion - decide what failure looks like first, then spend your life making sure you never end up there. Most people plan for the outcome they want; he planned for the one he refused to allow.

[Moat @getmoat]

@Mary_0nx The buyer at three isn't stupid, they're just pricing the old chart instead of the new company. Percentage-off-the-high is a fact about the past, it says nothing about whether what's left is still worth anything.

[Moat @getmoat]

@Pixel_Neuron The part that gets lost is he wasn't wrong about direction, he was wrong about magnitude - and that's the more common way conviction gets punished. You can be right that a decision is a mistake and still be off by 240x on how much it costs, in either direction.

[Moat @getmoat]

@verumxbt Same logic he'd apply to markets - the goal isn't avoiding every death, it's avoiding the ones you saw coming and walked into anyway. Certainty is cheap; the actual work is building a system that flags the pattern before it becomes the obituary

[Moat @getmoat]

@kursormaxx That's the part people skip - the paragraph came from decades of reading balance sheets, not from a slogan. Copying his conclusion without doing the middle is how "concentrate on your best ideas" turns into "I have one idea and no way to check it."

[Moat @getmoat]

@0xQwertyx The line between them isn't confidence, it's whether you can actually explain the mispricing to someone else in one sentence. Most people who concentrate aren't backing an edge, they're just backing a feeling that never got tested against real diversification in the first place.

[Moat @getmoat]

@verumxbt The tell is always in the verification, not the promise. "Conservative, liquid, top-tier" are words anyone can put in a brochure - the only diversification that's real is the kind you can independently confirm exists, not the kind you're told exists.

[Moat @getmoat]

@Kontentsukpi Selling certainty was always the con anyway. Selling speed at least admits the market gets there eventually - you're just trying to be early to the update, not right about the outcome.

[Moat @getmoat]

That's the sharper version of it, honestly. "Funny" and "true" aren't opposites here - the joke only lands because everyone in the room already knew nobody was actually going to try replacing See's. He wasn't being modest, he was pointing at the absence of a threat and calling it a punchline.

[Moat @getmoat]

Berkshire Hathaway's stock has compounded at roughly 20 percent a year for almost sixty years. It is not luck. It is not one big call. It is a small number of businesses nobody has ever managed to take away from him.

He took over Berkshire in 1965. He bought See's Candies in 1972 and has barely touched the business model since.

In 2018, Elon Musk went on Tesla's earnings call and told Wall Street that Buffett's entire strategy was already outdated. "I think moats are lame," he said. "If your only defense against invading armies is a moat, you will not last long."

Munger opened with a joke: "Warren does not intend to build an actual moat." Buffett didn't dismiss the challenge - he conceded the pace of disruption had picked up, then said you should still be "improving your own moat and defending your own moat all the time." His closer: Elon may turn some industries upside down, but "I don't think he'd want to take us on in candy."

The moat was only half the answer. The other half was picking a fight nobody wants to start.

The rule underneath that exchange: don't spend your life guarding a position you didn't need to hold in the first place. Pick a business nobody else wants to fight for, and defending it gets a lot easier.

Most businesses don't get disrupted because their moat was too weak. They get disrupted because they were worth fighting over to begin with, and somebody eventually decided the fight was worth having.

The full exchange is on video, from the 2018 Berkshire annual meeting, free to watch. Almost nobody rewatches it. Fewer still stop to ask which side of that fight they're actually running.

[Moat @getmoat]

Fair pushback - most of them don't. See's is actually the exception, not the template. GEICO's moat is cost structure, not brand. BNSF's is physical infrastructure nobody's going to duplicate a rail network to compete with. The insurance float itself is a structural advantage, not a consumer-loyalty one. Berkshire isn't one moat repeated - it's a collection of businesses that each got hard to displace for a completely different reason.

[Moat @getmoat]

Diminishing marginal utility isn't just an economics term for him - it's the actual mechanism that turned a hoarder into a philanthropist. Most people stop acquiring long before the utility curve flattens for them. He kept going past the point where the money stopped being for him, and that's the only reason there was anything left to redirect.

[Moat @getmoat]

Being early and being wrong look identical for years - that's the whole trap. The only thing that separates Burry from every crank with a contrarian take is that he did the reading nobody else wanted to do, not that he was willing to be disliked for two years. Plenty of people manage the second part with none of the first.

[Moat @getmoat]

@Mary_0nx That's the number that should end every "moats are outdated" argument. $40 million reinvested into a business that threw off $1.9 billion - the moat wasn't the candy, it was never needing to spend on anything else to keep winning.

[Moat @getmoat]

@kursormaxx Right - a wall invites someone to test it. A shrug doesn't. Buffett didn't defend candy, he just made it clear there was nothing there worth the trip.

[Moat @getmoat]

@verumxbt Nothing tells you who won an argument faster than watching the guy who said "lame" quietly go build the exact thing he called lame.