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Personal Finance

Personal Finance. Investing – Selecting High Quality Companies. The essence of investing in businesses (buying stocks). “We want the business to be 1). One that we can understand, 2). With favorable long-term prospects, 3). Operated by honest and competent people

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Personal Finance

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  1. Personal Finance Investing – Selecting High Quality Companies

  2. The essence of investing in businesses (buying stocks) “We want the business to be 1). One that we can understand, 2). With favorable long-term prospects, 3). Operated by honest and competent people 4). Available at a very attractive price.” - Warren Buffet, CEO Berkshire-Hathaway

  3. Last stock topics (for us) • Signs of High Quality Companies (Today) • Other investment options • Mutual Funds, ETFs, REITs, Bonds, options, short selling • Investing strategies • Value, growth, dogs of the dow, etc.

  4. Signs of High Quality Companies

  5. Industry Leadership • Is the company a leader in the industry? • For most industries, we know the answer off the top of our head! • Top dogs normally end up being worth the most money.

  6. Future Growth • Is the company growing? • Are its products and services becoming more relevant or less? • What is the LONG term outlook?

  7. Executive Leadership • What do you know about the leadership of the company? • What are their core beliefs and philosophy of honesty and service. • Are their employees “fired up?” • Look for articles on Google or in Business mags.

  8. The Competitive Environment • Who are the company’s leading competitors? • Have you tried the competitor’s products? • Are they better/worse? • The biggest company is not always the best • Look for rising stars

  9. The Business Model • How do they make their money? • Amazon vs. E-Bay vs. Google

  10. Protection • What is the up-front cost of doing business in the company’s industry? • The moat around the castle • The more money it takes to get into the business, the less likely competitors will join in.

  11. Brand Value • How strong and well-known are the company’s brands? • Strong brands make it easier to launch new products • Consumers generally go for familiar brands

  12. Keeping it straight… • The Quality Worksheet • See file on Moodle under today’s date!

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