Moat

A structural feature that lets a business earn returns above its cost of capital for a long time without competitors taking it away.

The test is numerical rather than descriptive. A company earning 30% on capital against a 12% cost has an 18-point spread, and the question is what stops that spread closing. Competitors read the same filings, see the same returns, and have the same access to capital. Something specific must be preventing entry, and if you cannot name it, there is no moat.

Five sources recur: network effects, switching costs, a durable cost advantage, intangible assets such as brand or licence, and efficient scale in a market too small for two. Everything else described as a moat is usually one of these under a different name, or it is execution, which is not a moat because it leaves with the executives.

The measurement is persistence. A high return for one year is a good year; a high return for fifteen is a moat.

Name the mechanism, then find its number.

If you cannot name it, there is not one.