Stock Investing Advices #1: Simple Business Model
It is not just about simplicity, but also something that you can understand.
Stock Investing Advices #2: Wide Economic Moat
Simply said, the company should serve valuable niche market with price inelastic products or services. Warren Buffet himself avoids regulated industries, commodity businesses as well as capital intensive industries.
Stock Investing Advices #3: Sustainable Growth
Serving the existing niche market is not enough. Instead, Warren Buffet wants the company to grow continuously and exponentially. Therefore, he looks for managements that have the ability to widen their economic moat consistently over the past years.
Stock Investing Advices #4: Excellent Capital Management
Every company that is listed in the stock market were entrusted to manage the business on behalf of their shareholders. Therefore, it is the managements’ duty to utilise the available resources for the highest possible return. To do this, they have to think and act like an owner and avoid the ‘institutional imperative’ style of management.
Stock Investing Advices #5: Effective Management Team
Invest in company that have honest and capable managers. They should be so capable that Warren Buffet himself admires the way the managers do things.
Stock Investing Advices #6: Superior ROE
Why ROE, and not the other financial ratios? Well, return on equity indicates how effective the management team convert the reinvested money into cash. The higher the return, the more profitably the company can reinvest its earnings. The faster the company able to turn the reinvested earnings into profits, the faster its value increases from one year to another.
Stock Investing Advices #7: Buy at Discount Price
It is not just about simplicity, but also something that you can understand.
Stock Investing Advices #2: Wide Economic Moat
Simply said, the company should serve valuable niche market with price inelastic products or services. Warren Buffet himself avoids regulated industries, commodity businesses as well as capital intensive industries.
Stock Investing Advices #3: Sustainable Growth
Serving the existing niche market is not enough. Instead, Warren Buffet wants the company to grow continuously and exponentially. Therefore, he looks for managements that have the ability to widen their economic moat consistently over the past years.
Stock Investing Advices #4: Excellent Capital Management
Every company that is listed in the stock market were entrusted to manage the business on behalf of their shareholders. Therefore, it is the managements’ duty to utilise the available resources for the highest possible return. To do this, they have to think and act like an owner and avoid the ‘institutional imperative’ style of management.
Stock Investing Advices #5: Effective Management Team
Invest in company that have honest and capable managers. They should be so capable that Warren Buffet himself admires the way the managers do things.
Stock Investing Advices #6: Superior ROE
Why ROE, and not the other financial ratios? Well, return on equity indicates how effective the management team convert the reinvested money into cash. The higher the return, the more profitably the company can reinvest its earnings. The faster the company able to turn the reinvested earnings into profits, the faster its value increases from one year to another.
Stock Investing Advices #7: Buy at Discount Price
