Buffet dares Musk to beat his candy biz, SpaceX founder accepts challenge

Elon Musk recently took aim at the idea a successful business needs a “moat” -- a competitive advantage that keeps rivals at bay. The pace of innovation, he said, is more important in the long run.

On Saturday, Warren Buffett and his business partner, Charles Munger, shot back.

“Elon says a conventional moat is quaint, and that’s true of a puddle of water,” Munger, 94, said. “It’s ridiculous. Warren does not intend to build an actual moat. Even though they’re quaint.”

Munger and Buffett, 87, were responding to a question at Berkshire Hathaway Inc’s annual meeting about Musk’s comments this week. The pair often talk about trying to expand the “moats” around their businesses.

“First of all, I think moats are lame,” Musk said during an earnings call for his Tesla Inc. on May 2. “They’re like nice in a sort of quaint, vestigial way. But if your only defense against invading armies is a moat, you will not last long. What matters is the pace of innovation. That is the fundamental determinant of competitiveness.”