How to find companies with strong competitive moats

In medieval times, castles that were best protected from sieges were those with the widest, deepest moats. On the investment battlefields of the stock market, moats are a figurative pointer to some of the strongest, most durable companies. But how do you find them?
The ‘economic moat’ is a metaphor first used by the billionaire investor Warren Buffett, to describe the type of business he likes to buy. These days it’s often used as a measure of durable competitive advantage.
The idea is that a select few companies not only churn out persistently strong returns, but they have extra advantages that make it difficult for rivals to copy them. As a result, their investors can benefit from superior returns that are compounded over the long term.
What makes a moat?
One of Buffett’s examples is the American auto insurance giant Geico, which is owned by his Berkshire Hathaway group. In recent years he’s regularly noted: “The company’s low costs create a moat – an enduring one – that competitors are unable to cross.”
In Geico’s case, the moat is the sheer scale of the business that allows it to dominate the market by operating at low cost. But moats aren’t always about size,…