How To Build A Company That Warren Buffett Would Invest In 1. Build an economic moat A term coined by Buffett himself, an economic moat is a metaphor for competitive advantage. The wider the moat – the more distance you can put between you and your competitors – the better chance at coming out on top you will have. 2. Be a strong rebounder Buffett believes that investors “should try to be fearful when others are greedy and greedy only when others are fearful,” as noted in a Forbes article by fellow contributor, John Reese. 3. Find a high margin business model, and then find higher margins Buffett looks at profitability at least five years into the past, if not ten, and he looks for a consistently increasing profit margin. 4. Perform consistently Buffett always looks at the Return on Equity (ROE) or the Return on Total Capital (ROTC). He is interested in indentifying if the company has consistently performed at its expected level or exceeded expectations. 5. Manage your money intelligently Buffett often judges companies based on measureable quantitative characteristics that indicate how intelligently management is managing their money. Essentially, he wants to know how much profit the company has generated as a result of the money it has reinvested in itself. ................... Thats what on my mind..!!!
Posted on: Sat, 14 Sep 2013 06:43:35 +0000
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