Topic

Investing

A collection of 26 issues

10 factors to judge the quality of a business

From an investing point of view, “high quality” is subjective. Subjective to your risk appetite, time horizon and your own biases. But it would be fair to say that, a company that can assure a certain amount of return over a period of time can be considered as

Coffee-Can Investing

Coffee Can investing was first popularized by Robert G. Kirby in an article he published in the fall of 1984. Coffee Can investing riffs off of an old-fashioned saving method where you physically earmark some money, put it in a coffee can, and basically forget about it. And only consider

Greenfield vs. Brownfield

Greenfield and Brownfield investments are ways in which a company can expand into other countries. They are 2 different types of foreign direct investment. Greenfield investment is when the company builds necessary resources from scratch in the new country. This could include building new plants, distribution centres etc. Greenfield option

Theoretical World Generator

A term I came across from Mental Models Vol. 1. But this is something that I have found myself doing and has been useful in helping me make decisions. When presented with a decision that is a) affected by a lot of uncertainty the future holds b) a large set

The Business of Spawning

Every successful business has done at least a few things right if not many. They have to find a product or service that they are good at. Possess some characteristic that differentiates them from their competitors. Find a market to sell to. And be profitable at the same time. Businesses

Comparative Advantage

Comparative advantage describes how trading parties will choose to produce more of a good that they have a comparative advantage of, and use that to trade for other goods that they don’t have a comparative advantage in. Comparative advantage forms a foundation for international trade. Comparative advantage is

Pricing Power

Pricing power allows businesses to price their product or services higher than the rate of inflation and that of the competitors without reduced sales. Pricing power can come from a few ways. A very high quality product. A patented efficiency or feature of convenience that competitors cannot match. Or when

Household Stocks

A layman idea that has permeated the investing world is that if you are using a product or service then and you enjoy it, then you should own the stock of the company behind it. This is a good example of why Albert Einstein said “Everything should be made

Microcap

Market capitalization is the total cash-value of a business. AKA market cap. The market cap is calculated by multiplying the current number of shares outstanding by the price of one share. For example, a company having 1000 shares of 10$ value would have a market cap of 10,000$. Companies

Systematic Thinking in Investing

One of the key ideas for investing well, over a long period of time is to handle as much of thinking using structured methods. Leaving things open and to be decided by chance is an easy way for it to get affected by emotions, biases and the chatter in your