By: musicwhiz
I've been rather busy the past few days, which explains the lack of posts. Anyhow, today I will be exploring how one should view investing, with regards to value investing in particular. Investing is actually part and parcel of growing our wealth, albeit slowly and steadily instead of instantly. Thus, the attitude one should take when approaching this important activity should be one of utmost seriousness, which is why the title mentions "business-like manner".
So what exactly does business-like manner mean ? This means observing a company as if you are a stakeholder who wishes to do business with the company, or acquire the company. Think of the company as a business and examine all facets of it. First of all, one should apply what I call a "common-sense" view of a business, by examining the nature of its principal activities. Companies which are in "commodity" businesses or those with a weird business model (a.k.a. something overtly innovative and which has no history of commercial success) should be shunned because it is unlikely that they can sustain increased earnings or ensure steady and predictable profits. Read more...