Monish Pabrai: The Shortcut to Finding Good Companies Starts with Your Shopping List
To find high-quality companies worth holding for the long term, the method is actually simple — make a list of the brands you consume daily. Do you go to McDonald's or other fast food restaurants? Do you use an iPhone or Samsung? Which brand of shoes, clothes, and headphones do you buy? Every consumer choice hides a company's competitiveness.
After making the list, filter out the listed companies that are publicly traded, and then ask yourself: Why did I choose it instead of its competitors? Is this company's business model sustainable? Will it grow or shrink in the future? As a real user, your understanding of this business is often more direct than that of analysts, and you may not even need to look at the financial statements first.
This method was strongly promoted by the legendary fund manager Peter Lynch. The core logic is: Brands that can make consumers willingly spend money repeatedly have already proven their competitive advantages.
A greater advantage is that young people are often the first to sense new trends. College students were the first to abandon landlines and later switched from cable TV to streaming media. Facebook initially circulated only in a few universities such as Harvard, and early users naturally stayed ahead of the outside world.
Your personal experience of changing consumption is the most authentic investment signal.
Original article: toutiao.com/article/1858724196795399/
Disclaimer: This article represents the views of the author himself.