According to Larry Sarbit, there are 4 pillars of successful business investing.
- Buy "wonderful" businesses.
- Paying a bargain price.
- Concentration: Own a few terrific companies.
- Have patience.
So, what is a "wonderful" business?
A "wonderful" business:
- A huge sustainable competitive advantage - a franchise.
- A growing stream of free cash flow.
- Simple, understandable.
- Stable - The basic business changes little over time.
- Predictable earnings.
- Consistent, repeated purchases of product or service.
- Not natural targets of regulations.
- Disaster proof - Most mistakes are forgiven.
- A royalty on the growth of others, requiring little capital itself.
- Good management.
To learn more of Larry Sarbit..... http://www.sarbit.com/welcome.php
Dah Hui Lau (David)
To visit my archive: http://dahhuilaudavid.blogspot.com/2005/11/archive-of-dah-hui-laus-blog.html