Dear reader,
The time has come when even I will start a blog. The reason why I do it is plain and simple, I will start a journey and wants to have the journey on paper when it's done.
My first post will not be an introduction about who I am, it will be a perspective of which kind of companies to own to make this journey as fast and smooth as possible. The second article will instead be an introduction, define the goal and how I will make it.
Let's start,
As the title says will I try to explain for you which kind of companies I will have in my portfolio and also the reason why I think these companies will beat the market in the long run.
Company A
Company A are a company that producing cars. The company are always facing a lot of heat from the competition and also pressure from the customers to have the most innovative cars with the latest things in it. To meet these drivers the company are doing the only thing they could do which is to invest heavily in their product portfolio to be ahead of the competition and meet the requirements from the customers.
Company B
Company B are a company that producing a sort of bread with a well known brand. They don't spend almost any money on their product portfolio, the recipe for the bread has been the same for 100 years and will much unlikely change in the upcoming years. They spend some money on marketing to maintain their well known brand by young customers.
The answer on which kind of companies I would prefer to have in my portfolio are not that hard to make. Which one of Company A and B do you think could promote the shareholders interest, do not lower their dividend in depressions and beat the market in the long run? From my perspective the question is simple, Company B.
Of course does everything comes with a backside as well, it needs to be a fair price of Company B. This requirement will be my first one on my investment path and I know it will help me lower the risk substantially.
Sincerely,
Eighth Wonder Investing
