- On Tesla's recent earnings call, CEO Elon Musk called one of Warren Buffett's core investment principles "lame."
- Buffett responded by reiterating the importance of the so-called strategic moats he's touted for many years.
- Follow Business Insider's coverage of Berkshire Hathaway's annual meeting 2018.
They were made in reference to the use of strategic "moats," which Buffett has historically touted as a key element of his investment equation. The thinking is that a moat is anything that serves as a competitive barrier to disruptive entrants to an industry.
"First of all, I think moats are lame," Musk said. "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."
Buffett wasn't having it.
"Being a low-cost producer is an incredibly important moat," he responded, while conceding that "Elon may turn things upside down in some areas."
"I don't think he'd want to take us on in candy," Buffett also joked.
The Berkshire chief went on to invoke Geico, one of his firm's investments. He noted that the technological advancement so highly touted by Musk hasn't lowered the company's costs by that much.
In the end, it's mightily apparent that Buffett is going to keep doing things his tried and true way, whether Musk likes it or not.
Follow along with all of Business Insider's coverage of the Berkshire Hathaway meeting here.
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