It’s not very often two of the richest men in the world clash. So, when they do, we listen, acknowledging the weightiness of their disagreement will probably have large, long-term implications for business and economics as we know them.
Or, you know, they could be arguing about candy.
Warren Buffett, chairman and CEO of Berkshire Hathaway Inc., and Elon Musk, CEO of SpaceX, Tesla, Inc. and Neuralink got into it after Musk said moats are “lame” on a Tesla earnings call last week, to which Buffett responded at the Berkshire Hathaway annual meeting, “Elon may turn things upside down in some areas, I don’t think he’d want to take us on in candy.”
An economic moat, in case you didn’t know, is a term Buffett popularized to describe a “business’ ability to maintain competitive advantages over its competitors” according to Investopedia.
Musk immediately responded on Twitter, saying he would start an amazing candy company and then build a moat to fill it with candy.
The point – which might not be clear in all the talk about medieval moats, candy and “lameness” – is that two of the greatest investors alive today are arguing about what happens when innovative upstart businesses come fast and hard for seemingly unassailable companies.
During the initial Tesla earnings call, Musk expanded on his comments, explaining that he thinks moats are a metaphor for being stuck in the past. “If your only defense against invading armies is a moat, you will not last long,” he said. “What matters is the pace of innovation.”
So, only one question remains: When the Team Musk and Team Buffett armies gather at dawn, which side will you be on?