Analyzing a Stock’s Economic Moat using STEP Analysis (Part 2)

We will continue our discussion using STEP analysis to determine if a stock has an Economic Moat that can survive different aspects of a market. This is a follow up from the last post. http://www.investment-in-stocks.com/investment-in-stocks/analyzing-a-stocks-economic-moat-using-step-analysis-part-1 In our previous post, we have discussed the first 2 factors of STEP, namely Social Cultural and Technological. This post we will look at asking questions regarding Economic and Political Factors.

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Analyzing a Stock’s Economic Moat using STEP Analysis (Part 1)

Lets move further indepth into understanding how to analyse a stock to decide if we would want to invest into it. First things first, Stocks are Businesses! Remember we are not speculating if a stock price will jump up, we are analyzing the stock as a business to see if this business is worth investing in. The first question we want to ask about this business is if it has …

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The Power of Fundamentals!

I love to play sports.  Since secondary school, i represented my school for Badminton and i love it. When i first joined the team in Secondary 1, our coach spent the first 3 months teaching us the basic stances. The rest of the year was spent learning and polishing just 1 technique – lobbing. In badminton, lobbing means hitting the shuttle cock from our side of the court to the …

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The 4 steps of Stock Investing

The 4 Steps of Stock Investing Whenever friends ask me what stocks to buy? I will answer that if I tell them “what stocks to buy” is only 1 step out of the 4 steps of the investing process and it will not be complete unless I show them the entire 4 steps. Lets take a look at the 4 steps A-B-C-D stock investment process:   A – Assess: Going …

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Understanding Financial Health of a Company

Understanding Financial Health of a Company In dissecting a business to check its “health”, we make use of the 3 Financial Statements: Balance Sheet Income Statement Cash Flow   In this post, we will look into the balance sheet:   The Balance Sheet The Balance Sheet is a financial statement that summarizes a company’s assets, liabilities and shareholders’ equity at a specific point in time. These three balance sheet segments give investors an idea as …

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The 4 Question Check List

The 4 Question Check List There is some probing questions you can ask when faced with a company you suspect has a competitive advantage   Q1: What is the Value the business is providing? Lets take for example we talk about KFC. The value is yummy chicken. We then move on to the next question.   Q2: Can you get it else where? The answer is yes to this question. …

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Competitive Advantage Part 2

Competitive Advantage Part 2 In the last post about competitive advantage we looked at the first 2 ways which a company can build an economic moat. Today let’s explore the other 3 ways: Low Costs or Prices Offering the same or similar product or service at a lower price can be a powerful economic moat, especially in commodity industries. Airlines and PCs are a couple of commodity industries. Cost advantages …

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Competitive Advantage Part 1

Competitive Advantage Part 1 In general there are 5 ways for a company to build a competitive advantage over its peers. Warren Buffet calls this competitive advantage as “economic moat”. An economic moat is the ability of the company to keep its competitors at bay from hurting its profits. The wider the moat, the longer the company can protect its profits. The deeper the moat, the more profitable is the …

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