Finance - Investing to be Millionaire
Mr. Buffett believes in buying good businesses at good prices and staying with them as long as they remain good. Don't try and figure out what the market is doing, figure out businesses you understand, and concentrate. Diversification is protection againist ignorance, but if you don't feel ignorant, the need for it goes down drastically.
Law of Wealth:
1. Pay Yourself First - set aside a regular chunk of money and will compound over time.
2. Set goals and write down the plans. Automate the saving plan.
3. Don't afraid to take risk, but do your homework.
Wealth creation = Time + Rate of Return + Tax
Benjamin Graham - Security analysis
An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. (margin of safety)
Philip Fisher
He believed superior profits could be made by:
1. Investing in companies with above average potential; and
2. Aligning oneself with the most capable management (fortunate and able). The company was "able" because the founders of the company were people of great ability. The company was also "fortunate" because events outside mangement's immediate control were having a positive impact on the company and its market.
Ability means:
R&D -to produce a better products and more efficient services
Sales - help customers understand the benefits of the product or services (bridge/link between the marketplace and the R&D unit)
Generate profits - its dedication to maintaining and improving profit margins, and finally, its cost analysis and accounting controls.
A company with a low breakeven point, or a corresponding high profit margin is better able to withstand depressed economic environment. No company will be able to sustain its profitability unless it is able to break down the costs of doing business while simultaneously understanding the cost of each step in the manufacturing process. In order to do so, a company must instill adequate accounting controls and cost analysis. This cost information, enables a company to direct its resources to those products or services with the highest economic potential. Furthermore, accounting controls will help to identify snags in a company operations. These snags, or inefficiencies, act as an early warning device aimed at protecting the company's overall profitability.
Superior companies possess not only above-average business characteristics but, equally important, are directed by individuals who possess above-average management capabilities. These managers are determined to develop new products and services that will continue to spur sales growth long after current products or services are largely exploited. The above-average manager simultaneously has the ability to implement the company's long-range plans while focusing on the daily operations of the company.
For a business to be successful, management must develop good working relations with all of its employees. Employees should genunely feel that their company is a good place to work.
Law of Wealth:
1. Pay Yourself First - set aside a regular chunk of money and will compound over time.
2. Set goals and write down the plans. Automate the saving plan.
3. Don't afraid to take risk, but do your homework.
Wealth creation = Time + Rate of Return + Tax
Benjamin Graham - Security analysis
An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. (margin of safety)
Philip Fisher
He believed superior profits could be made by:
1. Investing in companies with above average potential; and
2. Aligning oneself with the most capable management (fortunate and able). The company was "able" because the founders of the company were people of great ability. The company was also "fortunate" because events outside mangement's immediate control were having a positive impact on the company and its market.
Ability means:
R&D -to produce a better products and more efficient services
Sales - help customers understand the benefits of the product or services (bridge/link between the marketplace and the R&D unit)
Generate profits - its dedication to maintaining and improving profit margins, and finally, its cost analysis and accounting controls.
A company with a low breakeven point, or a corresponding high profit margin is better able to withstand depressed economic environment. No company will be able to sustain its profitability unless it is able to break down the costs of doing business while simultaneously understanding the cost of each step in the manufacturing process. In order to do so, a company must instill adequate accounting controls and cost analysis. This cost information, enables a company to direct its resources to those products or services with the highest economic potential. Furthermore, accounting controls will help to identify snags in a company operations. These snags, or inefficiencies, act as an early warning device aimed at protecting the company's overall profitability.
Superior companies possess not only above-average business characteristics but, equally important, are directed by individuals who possess above-average management capabilities. These managers are determined to develop new products and services that will continue to spur sales growth long after current products or services are largely exploited. The above-average manager simultaneously has the ability to implement the company's long-range plans while focusing on the daily operations of the company.
For a business to be successful, management must develop good working relations with all of its employees. Employees should genunely feel that their company is a good place to work.
posted by King at
6:04 PM
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