The problem

Vague qualitative assessments of "competitive advantage" lead to poor investment decisions. Analysts often struggle to quantify the durability of a business model beyond surface-level financial ratios.

What it does

• Evaluates businesses across six dimensions: pricing power, cash-flow quality, management, simplicity, downside risk, and competitive durability.
• Calculates a weighted composite score to categorize companies as Wide, Narrow, or No Moat.
• Scans for specific evidence of moat sources like network effects, switching costs, and cost advantages.
• Identifies qualitative red flags such as poor capital allocation or business model complexity.

Why this beats prompting it yourself

This skill enforces a rigorous, multi-factor framework that prevents confirmation bias. It requires specific evidence for each score, ensuring the final rating is backed by operational reality rather than investor optimism.

Use cases

• Perform pre-investment due diligence on long-term compounders.
• Compare competitive defensibility between industry peers.
• Audit existing portfolio holdings for signs of moat erosion.
• Evaluate the structural integrity of private company business models.

Known limitations

Not suitable for short-term trading, macro analysis, or purely quantitative screening. Requires manual entry of financial statements and management history for accurate results.