Stupid in Small

Stupid in Small I once heard a story of Warren Buffett playing golf with Bill Gates and their group of friends, not sure if it is a true story, but I found the story behind it very powerful. And also, personally I don’t play Golf so please pardon me if certain terminology is inaccurate. The group of friends came to the Par 3, which is apparently the one which has …

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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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Investment in Stocks

Investment in Stocks We all need to invest and I love to invest in various investments. Some of the investment vehicles could be: 1)     Stock 2)     Bonds 3)     Mutual Funds 4)     Real Estate 5)     Land Banking 6)     Precious Metals 7)     Collectibles 8)     Small Businesses   Of all these, I love the stock market for these reasons: 1)     Small Capital Outlay You need not have huge capital to start stock investments. …

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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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