How Claude changed the way I think about moats

Every investor has a moat story.

The brand that cannot be replicated.

The network that gets stronger with every user.

The switching costs so high that customers stay even when they are unhappy.

We learn the five categories, we apply them to every company we look at and we feel like we are doing serious analysis.

I did this for years…

Then I started using Claude to stress test moat claims.

And I realized I had been doing something that looked like analysis but was mostly pattern matching.

I was identifying moat categories, not interrogating whether the moat was real, how wide it actually was or how long it would last .

That is a dangerous gap to have in a thesis

In this article I cover:

• Why the standard moat framework feels rigorous but often is not

• The specific question Claude asked me that broke my old way of thinking

• How to use Claude to test whether a moat is genuine or just a narrative the company tells itself

• The difference between a moat that exists and a moat that compounds and why it changes everything about valuation

• A practical Claude workflow I now run on every company before forming a view on competitive advantage

• The prompt I use to find moats the market has not priced in yet

This article is for informational purposes only and does not constitute investment advice. Always do your own research before making any investment decision.

Pick up any investing book published in the last twenty years and you will find the same five categories.

Brand. Network effects. Switching costs. Cost advantages. Intangible assets like patents or licenses.

The framework is not wrong. It is just incomplete in a way that costs you money.

Here is the problem. The five categories tell you what type of moat a company might have. They do not tell you three things that actually matter for an investment decision.

Is the moat real or is it a story the company tells in its investor presentations?

Is the moat getting wider or narrower over time?

Is the moat already priced in or does the market not see it yet?

I had been stopping at category identification for years. Claude forced me to go further.