QuestionerElon Musk this week on his Tesla earnings call said the following, quote, I think moats are lame. They are like nice in a sort of quaint, vestigial way, and if your only defense against invading armies is a moat, you will not last long. What matters is the pace of innovation. That is the fundamental determinant of competitiveness, unquote. So Warren, it seems the world has changed. Business is getting more competitive, pace of innovation, technology is impacting everything. Is Elon right?
WarrenWell, Warren, Elon says a conventional moat is quaint, and that's true of a puddle of water. And he says that the best moat would be to have a big competitive position, and that is also right. It's ridiculous. Warren does not intend to build an actual moat, even though they're quaint. Yeah. There's certainly A great number of businesses. This has always been true, but it does seem like the pace has accelerated and so on in recent years. There's been more modes that have become susceptible to invasion than seem to be the case earlier. But there's always been the attempt to do it. And here and there, there are probably places. where the mode is as strong as ever, but certainly, you can work at, certainly should be working at improving your own moat and defending your own mode all the time. And then, uh, uh, uh, Elon may turn things upside down in, in some areas. I don't think he'd want to take us on in candy, but, but, but, and we've got some other businesses that when, is that way, see, uh, you can, uh, you can look look at something like granibles out there in the other room and, uh, it won't be technology that takes, takes away the business in granibles. It may be something else that catches the young kids' fantasy or something, but there are some pretty good moats around. Being the low-cost producer, for example, is a terribly important moat. And something like Geico, uh, Technology is really not brought down the cost that much. And that, uh, I think, I think our position has, there are a couple of companies that have costs as low as ours, but among big, big companies, we are a low-cost producer, and that is not bad when you're selling an essential item.