How to choose a company to invest in

How to choose a company to invest in->

Choose a company which has been in the industry for a long time (30-50 years).

The company should be successful. When the company does not do well, they talk about it in the Annual report.

It should have a good management, good business model, good balance sheet.

Focus on Bottom up investing (Focus on business).

Be conservative in valuing a business (Discounted cash flow etc).

Buy businesses which have survivability despite adversity (Safety is important).

Asset heavy companies like Coca Cola are good businesses to invest in as it prevents easy entry barriers. Do not buy stocks which have easy entry barriers unless they have a wide and deep moat.

Short periods of super normal profit are present in industries wih easy entry barriers while the reverse holds good for industries with difficult barriers of entry.