During the recent Daily Journal annual meeting (2/12/2020), Charles Munger was asked about the impact that technology is having on traditional moats. Here’s the question and his response:
Question: I have a question for you related to technology. There is this common sentiment that technology is both accelerating the pace of change and its impact is broadening across most industries usurping traditional moats. So given your long career, I’m wondering do you think the traditionally moaty industries are being undermined at a pace that’s different from what’s been happening in the past.
Charlie Munger: Yeah, I think the moats have been breached time after time after time.
Imagine the Eastman Chemical Company going broke. Imagine all these great department stores being on the edge of extinction. Imagine all those monopoly newspapers going down. Look at the strength of the American auto industry now compared to what it was, say in 1950.
I think the moats are disappearing rapidly. I mean the old classical moats. I think that’s probably a natural part of the modern economic system, is that old moats stop working.
Let me know what your problem is and I’ll try to make it more difficult for you.
You can hear the question and Munger’s answer here:
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