“I can describe how a business makes money in a simple sentence. If you can’t, you should not invest in it.” – Phil Town
This week on InvestED, Phil and Danielle continue their discussion on checklists diving into the letter “U” of their acronym for checklists, “RULES”. The “U” in “RULES” represents the importance of understanding the businesses you are investing in and being able to explain everything about the company in a simple sentence.
Phil stresses you should be able to know how the business makes money, how their top three competitors make money, what problem the business solves, why they fail, the key performance indicators that industry follows and so much more.
If you can’t answer all of these questions discussed in a simple sentence, Phil expresses that it’s too hard to understand, and you should not invest in the business.
Want to learn more about creating a checklist to understand businesses before you invest? Join us on the podcast today!
Subscribe & Review in iTunes
Are you subscribed to InvestED? If you’re not, we want to encourage you to do that today because we don’t want you to miss an episode. Our episodes are weekly and are sometimes multiple parts and if you’re not subscribed there’s a good chance you’ll miss out on current events happening in the market. That would be a major bummer. Click here to subscribe in iTunes!
Now if you’re feeling extra loving, it would be awesome if you left us a review on iTunes, too. Those reviews help other people find this podcast and Danielle and Phil also love reading them so that we can improve your listening experience. Just click here to review, select “View in iTunes”, then “Ratings and Reviews”, and “Write a Review” and let me know what your favorite part of the podcast is. Now go play!
By: Phil & Danielle
Title: InvestED: Ep. 254- How to Properly Understand a Business When Investing
Sourced From: www.ruleoneinvesting.com/blog/podcast/254-how-to-properly-understand-a-business-when-investing/
Published Date: Tue, 25 Feb 2020 16:22:43 +0000