Last Minute Check List ✅
We are buying for Eternity . => No one has the time to check QoQ . It has to be a bet which CANNOT go wrong in the next 5 years.
Make sure to buy Wonderful Quality business at a fair price, NOT cheap deap value public sector stuff. =>Share price is affected by 2 things alone . Valuation ( price to earnings / Market cap to Networth) and Earnings Growth. =>The challenge is to find Quality trading at fair price and load it up. Check the Price to Book and see if market is valuing it correctly wrt to its ROE.
We buy a GREAT Growing Business which is gaining market share from competitors NOT a Pidilite or Nestle like Defensive ROE business. => Check it's ROE track record over the years. Is it growing ? Is the revenue growing ? Is the earnings of the company growing ? Is it gaining market share ? What are the levers of growth ? Is it overpriced ? Is it in sunrise industry? Can it be disrupted ? Is there a Right to Win ? Is there a Moat ? Is there a Regulatory authority ? WHY WHY WHY ?
Promoter Holding should be significant. It should not be public sector. We NEED a fanatic promoter who has great track record of execution over the years
What is the downside ? If my thesis is bogus, what is average P/B and P/ E of this stock and will we lose money. And how much money ? Buy at a valuation where you don't lose money .