“Own companies that are like bonds, they’re so secure.” - Phil Town
This week on the InvestED podcast, Phil and Danielle continue their discussion on checklists, revealing the next six points on their list you should know about a company before investing.
Phil discusses the importance of owning companies that are secure like bonds. Warren Buffett calls these equity bonds. He says, why would you buy a bond when you can buy the company and get paid in a dividend and let that dividend grow.
How do the Rule #1 Investors find these companies? They use a checklist of course.
This week Phil and Danielle dive into the following questions to know when investing in a company:
The history of the business and how it has changed over time
Why businesses fail in the industry
Specifically, how the business fails
Why the industry will be going strong in 10 years
The key performance indicators the organization follows religiously
The key risks a business is taking in the industry
If you can’t answer all of these questions discussed in a simple sentence, it’s too hard, do not invest in the business.
Want to learn the most important questions to answer when creating a checklist? Join us on the podcast today!
Show Notes:
Invested by Phil and Danielle Town
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