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I like to keep things simple.
So when I look at a company, 5 characteristics that I focus on to determine a relatively safer company to invest in:
1. A Simple Business: The fewer things in motion, the fewer things that can go wrong. Businesses that focuses on maximizing profits from its core operations, rather than massive corporations that have many and often puzzling divisions, diluting efforts away from their strength and taking unnecessary risk into unfamiliar activities. Furthermore, they are easier to understand, and you should not invest in a company you cannot comprehend.
2. Steady Demand: Verify that there is constant and future demand for the product or service. Industries or sectors with recession-proof demand will enjoy consistent demand in good times and bad (eg. consumables, staples, food, utilities, alcohol, tobacco, health care). And especially businesses that have a competitive advantage, a niche, differentiating themselves from the competition.
3. Positive Cash Flow: Read more...[caption id="attachment_3174" align="alignright" width="150" caption="Photo by striatic"][/caption]
I like to keep things simple.
So when I look at a company, 5 characteristics that I focus on to determine a relatively safer company to invest in:
1. A Simple Business: The fewer things in motion, the fewer things that can go wrong. Businesses that focuses on maximizing profits from its core operations, rather than massive corporations that have many and often puzzling divisions, diluting efforts away from their strength and taking unnecessary risk into unfamiliar activities. Furthermore, they are easier to understand, and you should not invest in a company you cannot comprehend.
2. Steady Demand: Verify that there is constant and future demand for the product or service. Industries or sectors with recession-proof demand will enjoy consistent demand in good times and bad (eg. consumables, staples, food, utilities, alcohol, tobacco, health care). And especially businesses that have a competitive advantage, a niche, differentiating themselves from the competition.
3. Positive Cash Flow: Read more...
[/caption]
I like to keep things simple.
So when I look at a company, 5 characteristics that I focus on to determine a relatively safer company to invest in:
1. A Simple Business: The fewer things in motion, the fewer things that can go wrong. Businesses that focuses on maximizing profits from its core operations, rather than massive corporations that have many and often puzzling divisions, diluting efforts away from their strength and taking unnecessary risk into unfamiliar activities. Furthermore, they are easier to understand, and you should not invest in a company you cannot comprehend.
2. Steady Demand: Verify that there is constant and future demand for the product or service. Industries or sectors with recession-proof demand will enjoy consistent demand in good times and bad (eg. consumables, staples, food, utilities, alcohol, tobacco, health care). And especially businesses that have a competitive advantage, a niche, differentiating themselves from the competition.
3. Positive Cash Flow: Read more...
