“The Dirty Secret Behind Warren Buffett’s Billions”? Own Great Companies

Last week, The Nation ran a "Special Investigation" article on everyone's favorite capitalist Warren Buffett titled "The Dirty Secret Behind Warren Buffett’s Billions." The author, David Dayen argues that the secret to Warren Buffett's success is not his investment skill but his love of monopoly businesses, which earn excessive margins at the expense of customers.

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This view is correct to a certain extent, but it is by no means a secret. Warren Buffett has always made it clear that he is looking for companies that have a business moat, in other words, a competitive advantage that allows them to earn higher profits than peers and not be attacked by competitive forces as he put it in an...