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The market can be a cruel place for those who do not take the time to learn good investment methods and philosophy. If you are unable to examine a company in sufficient depth for you to say to yourself that you understand it then perhaps investing is not for you. Perhaps you should employ someone who has that competence.
Unlike the Lord, the market does not forgive those who know not what they do.
Warren Buffett (B.H. 1982)
Don’t despair though, even the relative beginner generally understands a great deal about one or two industries and the companies in those industries. For example, if you are in the building trade perhaps you know a lot about builders’ merchants or local house builders or tool hire companies. Use this as a base, and then fill in the gaps on accounting knowledge, strategic positions, etc.
The force……that creates one company in an industry that is an outstanding investment vehicle and another that is average, mediocre, or worse, is essentially people
Philip Fisher
If you can’t trust the people running the organisation to do so with both competence and in the best interests of shareholders then you are better off staying clear.
If, on the other hand, you come across a bunch of managers that are really good at what they do and instinctively think and act for shareholders, then you might be onto something big.
Remember: you can’t make a good deal with a b
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