The secrets of a successful business.

We all look for a good company when we want to invest in inequities. We want our investment to compound over years and deliver multifold returns.

The two biggest factors that play a crucial role in a profitable investment are good company and our ability to hold it for years.

Finding a good company is not rocket science. One investor with a good understanding can identify a company that is worth investing in.

Any good company has 4 distinct features.

  • competitive advantage,
  • stable earnings
  • above-average management
  • market leadership.

Competitive advantage or economic moat is the secret to all the investments of Warren Buffet.

Competitive advantage is the invisible force that differentiates a company from its competitors. A company that earns a stable revenue is always a better investment than a company that grows through the boom and bust cycle.

The management that runs the company plays a crucial role in the company. Capable management can foresee what is coming and steer the company through troubled times.

If a company is the market leader in its industry there is a high chance that the company will deliver a handsome return to its investors.

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