After going through so many books on investing, they all say the same thing, I wonder if the authors copied the content from another author or it is just the common truth that’s why they spoke the same thing.The best person to learn from is Buffett.
But labeling him the most successful investor in the world is quite an understatement, he is in my opinion an outstanding businessman. Without an acute business sense, it’s impossible to pick winning stocks by scrutinizing financial figures.
How to tell if a business will be profitable in years to come, say 5 to 10 years?
How to tell if a business has a competitive advantage over its competitors?
Financial ratios have no answer for that. Financial analysis is not that useful.
Business analysis is a better tool, business valuation is a better tool, competition analysis is a better tool, and marketing analysis is a better tool......
Forget about examining economic cycles and look for business cycles instead. Since, there is no way any business could have left untouched by economic downturn; I personally think that it’s more valuable to examine the business cycles. The duration of each cycles, how long it took for the business to reach its peak in the cycle, how much has profits increased when it’s at the peak, how does this compare to the last peak so on and so forth.
You need a business mind to pick up good business. Financial intelligence or high qualifications wouldn’t be very helpful here.
Looking at each product cycles, how has the R&D been performing since the last big sale, how does the new product compete with its competitors; there are so many things to this. Competition analysis is more important than financial analysis.
I prefer simple ways for analysis, financial ratios are not my cup of tea, I have to learn since I am moving into fundamentals and keeping distance from technical.
OK. Its weekend now, the weather’s bad when I wrote this, I going off for a quick bite and will be back after my trip from the national library.
See you.
But labeling him the most successful investor in the world is quite an understatement, he is in my opinion an outstanding businessman. Without an acute business sense, it’s impossible to pick winning stocks by scrutinizing financial figures.
How to tell if a business will be profitable in years to come, say 5 to 10 years?
How to tell if a business has a competitive advantage over its competitors?
Financial ratios have no answer for that. Financial analysis is not that useful.
Business analysis is a better tool, business valuation is a better tool, competition analysis is a better tool, and marketing analysis is a better tool......
Forget about examining economic cycles and look for business cycles instead. Since, there is no way any business could have left untouched by economic downturn; I personally think that it’s more valuable to examine the business cycles. The duration of each cycles, how long it took for the business to reach its peak in the cycle, how much has profits increased when it’s at the peak, how does this compare to the last peak so on and so forth.
You need a business mind to pick up good business. Financial intelligence or high qualifications wouldn’t be very helpful here.
Looking at each product cycles, how has the R&D been performing since the last big sale, how does the new product compete with its competitors; there are so many things to this. Competition analysis is more important than financial analysis.
I prefer simple ways for analysis, financial ratios are not my cup of tea, I have to learn since I am moving into fundamentals and keeping distance from technical.
OK. Its weekend now, the weather’s bad when I wrote this, I going off for a quick bite and will be back after my trip from the national library.
See you.
No comments:
Post a Comment