Warren Buffett responds to Elon Musk's criticism: 'I don’t think he’d want to take us on in candy'

    • Warren Buffett says companies with strong and sustainable moats do exist.
    • "Elon may turn things upside down in some areas. I don't think he'd want to take us on in candy," he said at the Berkshire Hathaway 2018 annual shareholder meeting Saturday.
    Warren Buffett
    David A. Grogan | CNBC
    Warren Buffett

    Warren Buffett disagrees with Elon Musk's assessment of one of his main investing tenets.

    Buffett has long advised investors to look for companies that have a "moat," or enough of a buffer around them to maintain a competitive advantage over industry peers in terms of brand strength and business model.

    Telsa's Musk said this week that "moats are lame" and "what matters is the pace of innovation."

    But Buffett says he believe companies with strong and sustainable moats do exist.

    "Elon may turn things upside down in some areas. I don't think he'd want to take us on in candy," Buffett said at the Berkshire Hathaway 2018 annual shareholder meeting Saturday. "There are some pretty good moats around. Being the low cost producer for example is a terribly important moat."

    Buffett did agree that in certain industries the pace of moat destruction has "accelerated in recent years." But he believes companies can still protect their competitive advantages. The investor added he thinks technology hasn't destroyed the moats in every industry.

    "Something like Geico, technology has not really brought down the cost that much [for its competitors]," he said.