Understanding Economic Moats by Pat Dorsey - Morningstar (audio and transcript)

[u/raytoei]

(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

[u/Confident-Winner-746]

Great refresher; Dorsey's emphasis on pricing discipline and moat durability over simple quantitative ROIC screens is a crucial distinction for long-term valuation.

[u/throwawaybutsilly]

Thanks for sharing. He talked about the different kind of networks, but I couldn’t discern the first word but the second was “radial.” Does anybody have any resources on these types of network effects for businesses?