Organizing our Library: Industries, Moats, & Business Models

We’ve long explored the most effective way to organize our library. A common approach is to use an industry classification like GICS to categorize listed companies. But this is not always helpful. It often doesn’t reflect the complex operating reality for many businesses. For example, how do you classify Amazon? Consumer discretionary retail? Information technology?

An industry classification also often doesn’t reflect how investors invest. While many investment teams are organized by sector, many investors look for similar attributes in companies across different industries. For example, an investor who owns Costco and understands the power of the low-cost model may also be interested in Ryanair or Basic Fit. A simple industry classification alone isn't a helpful discovery tool.

We’ve organized our library in 3 different ways:

1. GICS industry classification: MSCIs standard industry categorisation
2. Moats
3. Business Models

The added taxonomy of moats and business models aim to help you find new investment ideas. We group companies across industries with similar moats or business models. You can now follow any Industry, Moat, or Business Model to be notified of new material published on any company within these groups.

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You can view how GICS classifies industries here. We share context on how we categorize moats and business models below. As with any taxonomy, there is a layer of judgment involved. We only add a Moat or Business Model tag to companies we know and cover internally. If you find any company miscategorised, please let us know and we’d be happy to explore the specific case in more detail.

Moats