Negative. The concept of a moat is a sustainable competitive...

Negative. The concept of a moat is a sustainable competitive advantage that prevents competition from muscling in on a lucrative enterprise. For example trade marks (CocaCola), patents (pharmaceuticals), monopolies (only newspaper in town) and toll bridges(e.g. ASX). Warren Buffet's investment philosophy involves investment in "excellent companies" meaning those companies that have a number of traits, principally those that have moats. There are other characteristics that make an excellent company such as high ROE but low gearing, share buybacks, consistent increases in earnings, ability to increase prices with inflation and more.

This philosophy is really encapsulated in the Munger (as in Charlie) - Fischer (as in Philip) theory of expanding intrinsic value. Basically why a lot of companies with high PE ratios are really cheap. Basically Buffet is really Munger Fischer.

This strategy for investment is completely at odds with diversification. In fact Warren believes that diversification is something people do to protect themselves against their own stupidity (Opening line Chapter 26 in the book Buffetology by Mary Buffet and David Clark).

As an aside WB would never invest in BHP (or any commodity company) simply because it is not an "excellent" company. There are no sustainable competitive advantages. A tonne of the best Pilbara iron ore can be obtained from Rio as well as many other global companies. They are really prices takers in a competitive business where prices are driven down to cost plus margin to stay in business.

And that's just how it is.