We continue on our quest to try and think like the worlds greatest investor, Warren Buffett. If you missed the previous episode, it is a must listen before you continue with this one, as we begin answering 9 questions the master investor himself tries to answer when he’s looking to buy a company.
Mary Buffett, his daughter-in-law, has written a book called Buffettology, where she uncovers some of the practical techniques Warren uses to invest. We have both chosen a company each and we’re seeing how it stacks up against the 9 key questions. Last week we looked at the power of the brand name of each of the companies, and how strong consistent the earnings were. This week we delve into what the companies do with their earnings.
In this episode you will learn:
- do the businesses get to retain their earnings, and what that actually means
- how much the businesses spend on maintaining their current operations and why that is very important to know
- what ‘goodwill’ means and how to watch out for it
Stocks and resources discussed:
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