Clash Of The Titans: What Buffett, Musk Are Squabbling About

Clash Of The Titans: What Buffett, Musk Are Squabbling About

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by: Elizabeth Balboa, Benzinga Staff Writer

 

Warren Buffett and Elon Musk engaged in a repartee this weekend that culminated in Buffett goading a candy crusade and Musk considering the call.

 

To Moat Or Not To Moat

Last week, the Tesla Inc TSLA 2.92% CEO mocked Buffett’s long-held “moat” approach, which guides investors to companies whose brand strength and business model create high barriers to entry.

“I think moats are lame,” Musk said Wednesday on Tesla’s first-quarter earnings call. “They are nice in a sort of quaint, vestigial way. 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.”

At Saturday’s annual shareholder meeting, the Berkshire Hathaway Inc. Class A (NYSE: BRK-A) (NYSE: BRK-B) CEO conceded that innovation has made moats more “susceptible to invasion” but, citing his See’s Candies, ultimately defended the concept as crucial.

“Elon may turn things upside down in some areas. I don’t think he’d want to take us on in candy,” Buffett said. “There are some pretty good moats around. Being the low-cost producer, for example, is a terribly important moat.”

 

Willy Wonka’s War

Musk soon answered the perceived challenge.

 

 

The jocular series concluded with a more serious critique of Buffett’s moat theory.

 

 

Buffett responded Monday on CNBC with praise for the greener leader.

"He's trying to do something to improve a product and I salute him for that," Buffett said, adding that he’s never said anything negative about Musk. "The American public will decide whether it's a success, and it's not easy."

 

 

Photo by Heisenberg Media via Wikimedia. 

© 2018 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

 

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