5. Commodity Reliance - Deepstash
Ultimate Guide to Reducing Churn

Learn more about strategy with this collection

How to analyze churn data and make data-driven decisions

The importance of customer feedback

How to improve customer experience

Ultimate Guide to Reducing Churn

Discover 62 similar ideas in

It takes just

9 mins to read

5. Commodity Reliance

5. Commodity Reliance

  1. You might initially think of this question as a radical approach to narrowing down a company. Buffett, however, sees this question as an important one.
  2. He tends to shy away (but not always) from companies whose products are indistinguishable from those of competitors, and those that rely solely on a commodity such as oil and gas .
  3. If the company does not offer anything different from another firm within the same industry, Buffett sees little that sets the company apart.
  4. Any characteristic that is hard to replicate is what Buffett calls a company's economic moat, or competitive advantage.

840

1.41K reads

MORE IDEAS ON THIS

3. Profit Margins

3. Profit Margins

  1. A company's profitability depends not only on having a good profit margin, but also on consistently increasing it.
  2. This margin ...

848

1.75K reads

6. Is it Cheap?

6. Is it Cheap?

  1. This is the kicker. Finding companies that meet the other five criteria is one thing, but determining whether they are undervalued is the most difficult part of value investing. And it's Buffett's most important skill.
  2. To check this, an investor must determine a company's

830

1.28K reads

Warren Buffet's Investing Philosophy

Warren Buffet's Investing Philosophy

  1. Buffett takes this value investing approach to another level.
  2. Many value investors do not support the efficient market hypothesis (EMH) . This theory suggests that stocks always trade at their fair val...

855

4.6K reads

The Bottom Line

The Bottom Line

  1. As you've probably noticed, Buffett's investing style is like the shopping style of a bargain hunter.
  2. It reflects a practical, down-to-earth attitude.
  3. Buffett maintains this attitude in other areas of h...

827

1.83K reads

2. Company Debt

2. Company Debt

  1. The debt-to-equity ratio (D/E) is another key characteristic Buffett considers carefully.
  2. Buffett prefers to see a small amount of debt so that earnings growth is being generated from

859

2.07K reads

4. Is the Company Public?

4. Is the Company Public?

  1. Buffett typically considers only companies that have been around for at least 10 years.
  2. As a result, most of the technology companies that have had their initial public offering (IPOs) in the past decade wouldn't get on Bu...

837

1.58K reads

6. Is it Cheap? (cont.)

6. Is it Cheap? (cont.)

  1. Once Warren Buffett determines the intrinsic value of the company as a whole, he compares it to its current market capitalization - the current total worth or price.
  2. Sounds easy, doesn't it? Well, Buffett's...

825

1.3K reads

Warren Buffettβ€˜s Methodology

Warren Buffettβ€˜s Methodology

  1. Warren Buffett finds low-priced value by asking himself some questions when he evaluates the relationship between a stock's level of excellence and its price.
  2. Keep in mind these are not the only things he analyzes, but rather, a brief summary of what he looks for in his investment ...

832

4.05K reads

1. Company Performance

1. Company Performance

  1. Sometimes return on equity (ROE) is referred to as stockholder's return on investment.
  2. It reveals the rate at which shareholders earn incom...

877

2.71K reads

Warren Buffet's Way

Warren Buffet's Way

Buffett follows the Benjamin Graham school of value investing, which are :

  1. Look for securities whose prices are unjustifiably low based on their intrinsic worth.
  2. Look at companies as a whole - company performance, company debt, and profit margins, whether compan...

910

8.66K reads

CURATED FROM

CURATED BY

dymphna

Lawyer turned Artist Visionary Curator & Gallerist. Empowering self-love and joy through art & words. www.innerjoyart.com πŸ’ Instagram : dymphna.art

Read & Learn

20x Faster

without
deepstash

with
deepstash

with

deepstash

Access to 200,000+ ideas

β€”

Access to the mobile app

β€”

Unlimited idea saving & library

β€”

β€”

Unlimited history

β€”

β€”

Unlimited listening to ideas

β€”

β€”

Downloading & offline access

β€”

β€”

Personalized recommendations

β€”

β€”

Supercharge your mind with one idea per day

Enter your email and spend 1 minute every day to learn something new.

Email

I agree to receive email updates