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The Importance of Strong Balance Sheets and Profitability in Stock Investment
Strong balance sheets help companies endure difficult periods and avoid stock value annihilation, while consistently profitable companies with access to cash can weather through tough times. Profitable companies that continually reinvest and have high return on capital tend to correlate well with stock returns.
On today’s show, Stig Brodersen talks with co-host Clay Finck. They outline how and why you should invest in high-quality businesses.
IN THIS EPISODE, YOU’LL LEARN:
00:00 - Intro
01:43 - How to identify the best businesses
06:00 - Why you need to focus on barriers of entry when assessing a stock
06:44 - Why competition is for losers
18:28 - When management is important and not important in high-quality investing
23:07 - How you want the management to be compensated
24:41 - Why insider ownership is not only important but even more so how it was acquired.
57:13 - Why you should invest in stocks with two engines
1:03:01 - What is the Berkshire Summit, and how do you attend?
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
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