How I determine which assets to invest in A major part of my investment process is deciding how to allocate my capital to each asset class. I decide this simply by comparing the likely after-tax, real returns of each asset class. In doing so, I am mindful of the following fundamentals. Business earnings are largely [...]
Archive for April, 2010
Asset Allocation
Posted in Asset Allocation on April 23, 2010 | 2 Comments »
When I Will Sell A Business
Posted in When to Sell on April 16, 2010 | 3 Comments »
I have the following rules when deciding whether to sell a business I must sell a business when its price equals my estimate of its intrinsic value[1] I have this rule because once a business’s price equals my estimate of its intrinsic value there is no ‘margin of safety’ in owning it. How the business’s [...]
Technology and Competition
Posted in Technology and Competition on April 9, 2010 | 8 Comments »
As previously discussed, I have a rule that I will not buy a business unless it is highly likely to still exist in 10 years time.[1] The reason for this rule is simple. If the business does not exist in 10 years time it is likely to be a very poor investment. However, it is [...]
What is a Customer Captivity Competitive Advantage?
Posted in Customer Captivity on April 2, 2010 | Leave a Comment »
A customer captivity competitive advantage is where a business has ‘captured’ a customer. This can be because the customer has high costs in ‘switching’ to an alternative product or service provider, or high costs in ‘searching’ for this alternative, or simply because the customer has developed a strong ‘habit’ in buying the product or service.[1] [...]
Categories
- Asset Allocation
- Competitive Advantage – 1
- Competitive Advantage – 2
- Competitive Advantage – 3
- Controlling emotions
- Customer Captivity
- Earnings Growth and Profitability
- Economies of Scale
- Falsifying scenario’s
- Group Decision Making
- Ignoring market moves
- My Circle of Competence
- My Discount Rate
- My Quantitative Valuation Model – 1
- My Quantitative Valuation Model – 2
- Normalising Earnings
- ROIC and Competitive Advantage
- ROIC versus ROE
- Talking to Management
- Technology and Competition
- The Basics – Part 1
- The Basics – Part 2
- The Basics – Part 3
- Valuing using scenarios
- When to Sell
- Will the business survive?
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