By Jason Zweig

Back in March 1977, The Wall Street Journal published a Page One profile of a man who was "a curious mixture of the sophisticated and homespun." The 46-year-old was "a bespectacled man of medium height and medium build whose hairline is receding" and who "drinks nothing harder than Pepsi-Cola," but who peppered his conversation with quips about sports and quotations from the philosopher Bertrand Russell.

It was, of course, Warren Buffett, who had built Berkshire Hathaway into a conglomerate controlling more than $1 billion in assets. Much of the article recounts details now familiar to Buffett's many fans.

But it also contains this tidbit, food for thought today:

Media companies long ago lost that kind of pricing power, which Buffett likes to call a "moat." In recent months, the rise of artificial intelligence has been pummeling stocks in such industries as software and finance, as investors fear that companies formerly regarded as invincible could be stormed by AI.

At least three ETFs track indexes of stocks specifically screened for qualities that should ensure a competitive moat: VanEck Morningstar Wide Moat $(MOAT)$, First Trust S&P 500 Economic Moat $(EMOT)$ and Tema Durable Quality $(TOLL)$.

MOAT was launched in April 2012 and pretty much tracked the return of the S&P 500 until early 2024, when the hype over AI reached a deafening roar. Since inception, the fund trails the Vanguard S&P 500 ETF by 0.21 percentage points annualized -- but since the beginning of 2024, it's underperformed by an average of more than 9 percentage points annualized. TOLL and EMOT, launched in 2023 and 2024 respectively, are also lagging behind the S&P 500.

Are moats unsustainable in the age of AI? Or have they always been less sustainable than investors wanted to believe? Maybe creative destruction, as the economist Joseph Schumpeter called it, is simply the defining characteristic of capitalism -- making the pursuit of moats a lot harder than it sounds.

This is an edition of the Intelligent Investor newsletter, where Jason Zweig writes twice monthly about investment strategy and how to think about money. If you're not subscribed, sign up here.

Catching Up

Here's what I've written recently, in case you missed it:

How to Trade the War: Avoid Gimmicky Strategies and Overheated Assets

Why you ought to consider drastic investing moves the same way you should think about body piercings or tattoos.

Should Hot IPOs Get Special Treatment?

With offerings from SpaceX and OpenAI on the horizon, Nasdaq is considering a rules change that goes too far.

Financier Who Offered 'Guaranteed' High Yields Pleads Guilty to Fraud

Paul Regan's plea follows a series of columns I wrote examining his investment products.

Some Insights You Shouldn't Miss

Here's some of what I've enjoyed reading lately:

The late, great David Swensen invested right, and his imitators are investing wrong ( High Country Advisors).

Why is gold acting so weird? ( WSJ)

AI is taking aim at tax and financial planning ( RIABiz).

How to turbocharge the new "Trump accounts" for kids ( WSJ).

Gamblers on prediction markets threatened a reporter's life in a failed attempt to get him to falsify a news article so they wouldn't lose a bet ( Times of Israel).

"Rich" people are installing $250,000 tropical fish tanks in their homes ( WSJ).

But where are the customers' yachts? ( MutualFundObserver)

Last Word

About The Intelligent Investor

In The Intelligent Investor, Jason Zweig writes about investment strategy and how to think about money. To send feedback, reply to this email or send a note to intelligentinvestor@wsj.com. Sign up to get an email alert every time Jason publishes a column. Got a tip for us? Here's how to submit.

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March 25, 2026 11:00 ET (15:00 GMT)

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