When investing in companies, we effectively transfer our trust into company management to allocate our capital in a way that benefits us as shareholders. Therefore, investing money with only the highest quality and trustworthy management becomes paramount. Characteristics of High Quality Management
What is Financial Analysis? Financial analysis is the process of collecting, assessing and interpreting a company’s financial numbers reported in financial statements (income statement, balance sheet, and cash flow statement), as well as answering investment questions that cannot be answered solely by looking at the financials. The goal of financial analysis depends on the user …
What is the Circle Of Competence? The circle of competence is an investing concept introduced by Warren Buffett and relates to making investments only in companies that one is capable of understanding, i.e. companies that fall within one’s circle of competence. In other words, one needs to be able to figure out how a company …
Profitability Moat Competitive Analysis Growth Prospects Management Quality Capital Allocation Personal Analysis Capability Bear Case – What Could Go Wrong? Valuation
Main pillars for selecting companies to invest in:
An economic moat is a synonym for a company’s competitive advantage, or set of competitive advantages, and can be regarded much like a moat around a castle. When a company starts to generate big profits, it will attract competitors trying to chip away from of those profits. A moat will help the company keep these …
