As I have written a lot about the intelligent investing with my previous article and if you already read the same, you can consider this as the final points to have quick refreshment to your mind. Here I am intending to give you highlights from my previous articles that totally focused on intelligent investing. This can consider as your first point to start profitable investing.
The basic strategy of investing success is, should invest on very best companies and for long term. To do such, you required to spend enormous time for researching and identifying possible gems among thousands of listed companies. Your preliminary focus based on some successful facts help you to shortlist all the best companies for your further study and selection to invest.While looking for a company, give your maxim attention to identify one that has excellent durable competitive advantage to its product. I am explaining further here for you to understand the idea behind such. You must select a company with a product or service that has considerable monopoly in the market. The word monopoly mean, a product or service giving a feeling to the customer that, they cannot live without that and leaving no or very little space for any competitors to enter to the market with similar product or service.
The next important point to keep in mind is, the production cost of the company. Always consider any company that have low production cost but great quality products compare with its competitors. Such advantage exposing a company’s ability to survive in the market in case of any bad situations like economic recessions, that force them to slash the price for there product to a great extend. Not only that but, such companies possibly have huge cash in there hand as the balance to utilize for better business purposed or expanding there business to new areas.
The third important factor to keep in mind is the ability of marketing. A good managed company never spends money for any extravagance but it properly utilizes the money to deliver the result to maximum possible customers through cost effective way. Keep to get away from those companies who spending investors money for extravagance like conducting or sponsoring territorial shows or television programs to attract customers. This is a good method of advertising but the result will be very poor. Such shows have ability to attract people from some territory or some group. Companies who focused and engaged to mainstream advertisement campaigns will be the best to attract maximum customers.
The fourth point to consider is the management efficiency. Always get away from companies that giving huge bonus to there management team at the end of each year or any special occasions. Always move away from companies where any competitions alive in between management candidates on possible designation hike. Select a company that have a good team of management who have innovative ideas to always keep company status at the top of the raw.
If your company is a manufacturing company, identify the perfection of there research and development facility. A well advanced and cost effective facility helpful to continuously increase the product quality as per customer requirement and maintain its monopolistic status in the market all the time.
Once you have short listed companies that have all the above mentioned qualities then you can start analyzing the earning capacilty of the the company to identify possible profit for long term. I will post the same with my next post as the continuation of this article.
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