Friday, May 21, 2010

The Great, The Good and The Ugly

This List will serve as a guide as to where one should invest.

The Great
  • in quasi-monopoly position
  • high competitive advantage
  • distinctive products/services
  • great management team (historically the GM/CEO made rational business decision)
  • possible in blue-ocean
  • sustainable above average growth rate or having the potential to have above average growth rate
  • great long-term investment
  • keep this sort of company under your radar when the price is not right, when it is right you'll know what to do

The Good
  • average growth rate
  • have consistent earnings but could be unsustainable
  • have consistent earnings but low margins due to competition
  • undistinctive products/services
  • have good management but average business economics
  • good short to medium term investment (short term for me is 1-2 years)
  • a value buy

The Ugly
  • have cut-throat red-ocean business economics
  • inconsistent earnings
  • extremely low margins and could turn red if overall macroeconomics condition turns bad
  • mediocre management
  • generally, an investment you should stay away regardless of its price
I'll start to place the companies I researched into one of these categories. Well, these are my own opinion. You might have your own and I greatly welcome your thoughts.

We are all learning :)

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