"The Pulse" -- #112 / Digging a Moat

Recruiting Timeline:

Banking:

Where We’re At:

• SA 2027: No new updates here—won’t see anything here until September

• SA 2026: VRA Partners and TAP Advisors opened their SA 2026 apps. 107 firms are recruiting for SA 2026

• FT 2026: Wells Fargo, VRA Partners, Ducera Partners, and Harris Williams opened their apps. 17 firms are actively recruiting for FT 2026  

• If you need some interview support or just need a place to vent, check out our Coaching Program: Coaching for banking, consulting, and buyside recruiting | The Pulse. 95%+ of those coached for the summer 2025 recruiting season received offers!

New SA 2026 Applications:

• VRA Partners: Boutique M&A (SA 2026)

• TAP Advisors: Boutique M&A in NYC (SA 2026)

New FT 2026 Applications:

• Wells Fargo: Largest, non-BB bank making an IB push (FT 2026)

• Ducera Partners: Restructuring boutique (FT 2026)

• Harris Williams: Richmond-based M&A, solid exit opps (FT 2026)

• VRA Partners: Boutique M&A (FT 2026)

See below to gain access to our premium database, updated weekly, which houses the application processes for over 300+ banks/consulting/buyside firms! Gain an edge over everyone else by not having to spend countless hours tracking applications and deadlines.

Consulting:

Where We’re At:

• Charles River Associates released its full-time app. They are a big name in economic consulting. A somewhat niche area, but well-respected.

SA 2026 released apps:

• None

FT 2026 released apps:

• Charles River Associates - Consulting Analyst (FT 2026)

Buyside:

Where We’re At:

• SA 2026: Radian, Five Rings, and Prudential Financial all opened apps this week. Currently, 114 buyside firms are recruiting for SA 2026 seats 

New SA 2026 released apps:

• Radian: Growth equity (SA 2026)

• Five Rings: Quant trader (SA 2026)

• Prudential Financial: Real estate equity investing (SA 2026)

The database is updated weekly and contains 300+ Investment Banking and Consulting internships/full-time positions along with:

• Interview tips for specific companies

• Interview prep material

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• Insider information about the application process

• Professionals to network with

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We send the updated dataset every week with the latest banking and consulting job postings. We released our 112th update today.

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Market Update:

Building a Moat

What makes a company truly differentiated? How can it defend its differentiation? What tactics can it use to bolster its competitive positioning?

Today, we will investigate the making of a moat. Likely one of the most misunderstood components of any investment.

First, what doesn’t create a moat today:

1. Capital intensity

2. Core business models without a brand

3. First mover advantage

Let’s pull in UPS as a case study to conceptualize why the aforementioned points do not create a moat.

United Parcel Services ‘UPS’ is a well-known brand without a true moat. In fact, it has a bunch of ‘false moats.’ The market recognizes this and therefore UPS trades nowhere close to market. This is an underperformer on a total return perspective.

Everyone knows UPS because it’s been around since 1907 and is a large distributor of packages, mail, and goods nationwide. You’ve definitely had UPS ship you something at some point throughout your life. But do you really care if UPS is the one delivering your package? What if it was Fedex? What if it was some company called “American Shipping Co.’? What if it was USPS (did you know this was a different company from UPS, lol)? What if it was Amazon?

Personally, I don’t give a fuck about the shipper. I just care about the contents of my package and whether it gets from point A to point B in a timely manner.

UPS fills a core business need, but the brand is replaceable. That’s a problem and now you have companies like Amazon eating their lunch (and market share!). A reason for Amazon starting its own shipping and logistics arm was because companies such as UPS were slow and unreliable. It’s never a good story when one of your largest customers is so unhappy that they just do it themselves.

For years, analysts have claimed that the capital intensity of starting a nationwide shipping and logistics business helps insulate UPS’s market share. Once again, I’ll point to Amazon to disprove this false moat. It took UPS over 100 years to get to where it is today…it took Amazon ~1 decade to rebuild its in-house UPS. You still need capital to build a shipping & logistics business, but capital accessibility has never been easier.

As a company started in 1907, UPS had a 70-year first mover advantage in the nationwide shipping and logistics business relative to its competitors such as Fedex. Yet, the companies practically share an equal portion of the United States courier and parcel delivery market.

This is a company without a true moat. I got flamed in an interview for presenting a LONG for UPS, don’t do the same.

So, what does a moat actually look like?

I’ll define a moat as a competitive advantage that supports a Company’s ability to last a lifetime generating above-market growth.

Some real moats.

• Undeniable Brand Allegiance

“Can I have a Coke?” No one says “Can I have a Cola?” That’s undeniable brand allegiance. Coca-Cola has spent over a century solidifying itself as the leading supplier of soft drinks in the world. They do whatever it takes to make sure the entire World knows their brand.

They’ll lace their products with real drugs (cocaine before 1930), they’ll do questionable air drops in remote corners of the world that don’t even have potable water, and they’ll make any acquisition necessary to eliminate competition.

^one of the strongest brand names ever created. A deep and wide moat for any competitor.

• Incredible Management Discipline

Knowing when to hold them and knowing when to fold them is a classic saying in Poker. Many management teams just hold forever. They play by the status quo and run the business ‘as-is’ to avoid volatility in their net worth which is hopefully tied mostly to the performance of the underlying business.

A truly strategic management team that knows how to play its chips creates outsized value for a firm. You can sell whatever product you want, but two companies selling the same thing with different management teams will inevitably realize very different long-term performance.

Let’s look at Meta. Zuck is a monster. He was at the forefront of social media before anyone knew what it was—Facebook was revolutionary. 20 years later and he is still the King of social media (ironic because he is such an awkward guy).

Some of Zuck’s greatest examples of incredibly managerial discipline were: a). buying Instagram in 2012 when he noticed younger generations leaving Facebook to the old heads, b). going nuts deep in the metaverse (even changed the Company’s name) and then quickly pivoted away, and c). sacking tf up to buy OpenAI engineers for pay packages north of $300mm.

IMO, the most impressive thing Zuck did was acknowledge his mistake on the metaverse push and then quietly pivot to the more tangible AI narrative. Ask smart people how often they think they’re wrong. They rarely admit it, but Zuck did.

^being a dynamic and hungry manager is a real moat.

• Intensely Powerful Relationships

Being in a position like Palantir and bagging exclusive government contracts is a powerful relationship to manage. Competitors simply can’t do it and miss out on $ billions in revenue. The real moat here is being able to penetrate the U.S. government’s fortress and harvesting value from the inside.

However, a powerful relationship is also a huge risk. This will become your largest customer and generate the bulk of your revenue. Losing that customer impairs your business. Companies providing insignificant or auxiliary goods / services to large customers are closer to the chopping block than many think.

^providing core goods / services to strategic customers is a moat.

• Perfect Capital Structure

I don’t have a great example here, but a perfect capital structure can definitely serve as a moat. Let’s say you have Company A with a blended interest rate of 10% and Company B with a blended interest rate of 5%.

Let’s say these companies are mortgage originators. In this scenario, Company A would be bankrupt and Company B would be thriving. Why?

Well, the 30-year floating rate is 6.87%. Company A is using capital that costs 10% to originate loans that only return 7%. They’re literally burning money.

On the other hand, Company B is making ~2% on every mortgage originated. They’re printing money hand over fist. Nothing is different other than the fact that they have a perfected capital structure relative to Company A.

Obviously the mortgage industry is more complicated than the example laid out above. 

• Niche Dominance

The final moat covered is niche dominance. Specialization and focus on being great at one thing or only serving one tiny industry can allow you to dominate that space.

I do a lot of fishing and when I go away I’ll book a guided trip if I’ve never targeted a certain fish before. A good guide will make or break the entire trip. Going with the guy who has decades of experience covering one body of water targeting one species of fish is often much better than going with the guide who does fishing trips, wakeboarding, sunset cruises, snorkeling trips, etc.

For every hour a '‘guide” is taking tourists on a sunset booze cruise is one hour removed from mastering the fishery.

It’s a smaller market, but the true fishing guide will dominate it over the guy who does everything.

Disclosure: Nothing written here is financial advice or should be used for investment decisions.

Negotiation and People Skills

In the age of AI, people skills such as negotiation and strong communication are the skills that are going to lead to promotion and success in finance.

Being the best modeler is becoming less of a differentiator.

Being the best slide creator is also becoming less of a differentiator.

Being the best of anything regarding analysis is now less of a differentiator.

This is nothing new tbh. All of those skills mentioned above have already been diluted by cheaper labor offshore. However, the full operation was never able to leave the U.S. because clients never stamped offshore-originated analysis with the same credibility as onshore-originated material. Therefore, healthy numbers of U.S. analysts and associates were needed to support analytical work. That’s changing.

It’s more apparent than ever that junior talent is just a cost. Your job can be automated and you’re not generating revenue for the firm. However, some number of juniors will always be needed. One day, someone will need to captain the ship after the old heads retire.

Now more than ever it is necessary for juniors to demonstrate excellent people skills. Client relationships, putting together capital structures (ie talking to investors), understanding how to fully manage processes, and sourcing new deals / investments for the firm will be the path towards promotion.

You used to be able to slip by and get promoted to VP just by demonstrating strong analytical skills. That’s no longer the case. It will eventually become difficult to even rise the ranks to associate without mastering some of the more ‘people-oriented’ skills.

What sucks is that junior roles are often less ‘client-facing’ and have less avenues to develop people skills.

The easiest path to go down is to begin assuming greater responsibility managing processes. If you’re working on an M&A deal, even as an analyst you can start exercising process management by being the first to coordinate meetings with other teams, provide updates to your seniors on key milestones, and provide initial thoughts regarding client responses up the chain to your senior associate / VP.

^seniors will notice this and begin exposing you to more opportunities to develop greater people skills. Marc Rowan was nicknamed the ‘Managing Analyst’ because of his strong ability to manage processes at an early age.

Know what to do before you’re told. Be proactive instead of reactive to instruction.

Going Forward:

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“The Pulse” #112

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