Key insights
- Pat Dorsey, former Director of Equity Research for Morningstar, discusses economic moats, their sources, and durability. He highlights the importance of management quality and pricing discipline. The interview touches on the evolving landscape for returns on invested capital and the impact of AI. While not directly impacting immediate market movements, understanding economic moats is crucial for long-term investment strategy and identifying companies with sustainable competitive advantages.
(TLDR: this is a good refresh article on what are economic moats. Audio and text transcript are provided in the links below)
Pat Dorsey: Economic Moats and More
Morningstar’s former head of equity research on what investors get wrong with moats, what to look for in company management, why quantitative screens are less useful than they were, and the process he uses to filter out signal versus noise.
Amy C. Arnott, CFA and Ben Johnson
Mar 31, 2026
Today’s guest on The Long View is Pat Dorsey. Pat is the founder of Dorsey Asset Management, a boutique asset manager serving institutional clients. From 2000 to 2011, Pat was the director of equity research for Morningstar, where he led the growth of Morningstar’s equity research group from 20 to 90 analysts. Pat was instrumental in the development of Morningstar’s economic moat ratings, as well as the methodology behind Morningstar’s framework for analyzing competitive advantage. Pat is also the author of two books, The Five Rules for Successful Stock Investing, and The Little Book That Builds Wealth. Pat holds a master’s degree in political science from Northwestern University and a bachelor’s degree in government from Wesleyan University. Pat is a CFA charterholder.
Episode Highlights
* Defining Economic Moats and Moat Source Mistakes
* Shifting Landscape for Returns on Invested Capital as a Metric
* Inevitable vs. Noninevitable Moats
* Moat Durability, Network Effects, and Lessons From PayPal
* Management Quality, Founders, and Pricing Discipline
* High-Quality Companies, “Too Hard” Bucket, and AI Uncertainty
* Premortem, Behavioral Edge, and Opportunity Cost
Text: https://www.morningstar.com/stocks/pat-dorsey-economic-moats-more
Audio: https://the-long-view.simplecast.com/episodes/pat-dorsey-economic-moats-and-more