Welcome to the Investing for Beginners podcast. In today’s show, we discuss:

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All things investing with Todd Wenning of Ensemble Capital
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How moats work, ways to look for moats, and the importance of them on our investment choices
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The absolute best definition of returns on invested capital like we were high-schoolers
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The differences between intrinsic value and relative value
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The good and bad of following sell-side analysts
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The importance of corporate culture and some ways to identify good ones.


For more insight like this into investing and stock selection for beginners, visit stockmarketpdf.com

Today’s show is sponsored by:

Koch Industries – Good Profit

Policy Genius

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Transcript

[00:00:00] Dave: All right, folks, welcome to Investing for Beginners podcast today. We have a very special guest with us today. Today we have Todd Wenning, who is the senior investment analyst with Ensemble Capital. He’s here to talk to us about all things, stock investing. So Todd, thank you very much for taking the time to come talk to us today. We really appreciate it. And with that, I’m going to turn it over to you guys, and we’ll go ahead and get our conversation started.

[00:00:23] Andrew: Yeah. Todd, thanks for coming on. Want to start with moats because I feel like it. Investors probably can’t talk enough about them, in my opinion. They’re fascinating, and they are key when it comes to looking at good companies. Maybe for somebody who’s just tuning in for the first time as a beginner, can you explain what the moat is? And then maybe we can talk about how you look for them?

[00:00:44] Todd: Sure. Thanks very much for having me. It’s a real pleasure to be here. I would say my introduction to moats came from joining Morningstar as a sell-side analyst in 2011. And that was really a transformational educational moment for me as an investor because before, I would think this company’s done really well.

Look how big it is. Look at its market share. Maybe that key part of its advantage, but that isn’t enough. You kinda need to have a framework for filtering companies and understanding Competitive advantage durable. And so that’s the key part of economic mode analysis. So moat, the term moat comes from Warren Buffettttttt’s moat described, in capitalism, you have a castle, and everybody’s trying to attack your castle, especially if you start generating good returns.

And so what you want is a wide moat around that castle to keep ...