#25 How To Identify The Right Business To Invest In

Updated: Nov 6, 2020


Choosing the right organisation to invest in is like starting with the core of a building any structure. There are multitudes of options that are to be measured and examined before deciding to invest in any organisation. One wrong step can cost you enormous sums of money as all of us are aware that business is all about risk there are always ups and downs in the market value of any individual product.

As a new investor, you may hear this and marvel what really makes an organisation a great business and how to spot one. While that theme is sweeping and hard to consolidate, it's not hard to make sense of what to search for in a private business or when getting portions of stock shares. So let’s get started without further ado!

Rule 1 - Businesses That Earn High Returns on Capital

Always try to invest in the stocks that provide you with the well-structured, effortless and crystal-clear understanding of the business model of the company.The higher the return on capital, generally speaking, the better the business.

“What we really want to do is buy a business that’s a great business, which means that business is going to earn a high return on capital employed for a very long period of time, and where we think the management will treat us right.” -Warren Buffett

Rule 2 - Business With Strong Financial Standing

You need to always assess financial health of the company. Begin with knowing the financial reports, annual reports, quarterly reports. Inspect for the revenue growth, the amount of debt the company owes to any other company, examine for the bottom line. See the long-term record of the company and try to anticipate for the future growth.

Rule 3 - Established Companies That Pay Dividends

You should emphasise on the companies that are willing and always pay out the dividends. This ensures that you’d be able to get faster returns with a monthly dividend cheque. Choose the right company that gives you maximum profits in future.

Rule 4 - Companies With Excellent Nurture

Keep in mind that you should try to invest for the companies that have excellent nurture. The top recognised and established brands are the example of good breed of companies.

Rule 5 - Business With Scalability

Choose businesses that have high scalability for growth. While small start-ups requires less capital, investing large-cap or mid cap companies. It is not compulsory that you should not go for the small cap companies if you find it good and profitable you can surely invest in it.

Armed with knowledge and data with a strong support system from MCM, you get an opportunity at being increasingly effective in your journey to fabricate an arrangement of wealth-generating assets that can give financial freedom and security to you and your family.

 
Max Capital Management Holding Ltd

1702, 17th Floor,

Sino Centre,

582-592 Nathan Road,

Mongkok, Kowloon,

Hong Kong

+852 2384 0332

enquiry@maxcapital.me

Send Us a Message
  • Facebook Social Icon
  • LinkedIn Social Icon
  • Instagram
  • YouTube

Copyright © Max Capital Management Holding Ltd. All Rights Reserved.

Read Privacy Policy & Disclaimer.