Today’s guest on The Long View is Pat Dorsey. Pat is the founder of Dorsey Asset Management, a boutique asset manager serving institutional clients. From 2000 to 2011, Pat was the director of equity research for Morningstar, where he led the growth of Morningstar’s equity research group from 20 to 90 analysts. Pat was instrumental in the development of Morningstar’s economic moat ratings, as well as the methodology behind Morningstar’s framework for analyzing competitive advantage. Pat is also the author of two books, The Five Rules for Successful Stock Investing, and The Little Book That Builds Wealth. Pat holds a master’s degree in political science from Northwestern University and a bachelor’s degree in government from Wesleyan University. Pat is a CFA charterholder.

00:00:00 Defining Economic Moats and Moat Source Mistakes

00:05:34 Shifting Landscape for Returns on Invested Capital as a Metric

00:07:52 Inevitable vs. Noninevitable Moats

00:09:36 Moat Durability, Network Effects, and Lessons From PayPal

00:13:46 Management Quality, Founders, and Pricing Discipline

00:24:02 High-Quality Companies, “Too Hard” Bucket, and AI Uncertainty

00:29:29 Premortem, Behavioral Edge, and Opportunity Cost

AI Isn’t an Economic Moat Killer, but It Will Disrupt Industries

Lawrence Lam: ‘The Types of Companies That Attract Me Are Founder-Led and Profitable’

How to Measure a Company’s Competitive Advantage

If you have a comment or a guest idea, please email us at [email protected].

Follow Christine Benz (@christine_benz) and Ben Johnson (@MstarBenJohnson) on X, and Christine Benz, Amy Arnott, and Ben Johnson on LinkedIn. Visit Morningstar.com for new research and insights from Christine, Ben, and Amy. Subscribe to Christine’s weekly newsletter, Improving Your Finances.

If you want more Morningstar podcasts, check out The Morning Filter and Investing Insights.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.