Growing Rich - Arabictrader.com

GROWING RICH WITH GROWTH STOCKS
in. Although almost no corporation has every one of these qualities,
he searches for those that exhibit at least a majority of them:
1. First-class management. “When I visit a company, I look for
management with a record of doing what it says it’s going to
do.”
2. Insider ownership. “Just as I invest heavily in my own funds,
I look for managers who own significant stakes in the companies
they run.”
3. Strong returns on capital. “I seek companies that wisely invest
their capital and reap returns on that investment.”
4. A lean expense structure. “Companies that keep their own
costs low are in a much better position to compete, especially
in difficult times.”
5. A dominant or growing market share in a growing market.
“A firm that is increasing its share of a growing market has the
best of both worlds.”
6. A proven record as an acquirer. “When a specific industry or
the entire stock market goes through a downturn, I want to be
invested in companies that can take advantage of low prices to
build their own positions through inexpensive acquisitions.”
7. A strong balance sheet. “Strong finances give a company
staying power to weather difficult economic cycles.”
8. Products or services that do not become obsolete. “Many investors
are left high and dry because they have invested in firms
with products that eventually are replaced by a competitor’s
stronger offerings.”
9. Successful international operations. “A proven ability to expand
internationally reduces the risk of being tied too closely
to U.S. economic or business cycles.”
10. Innovation. “The savvy use of technology in any business -
from a food company to an investment bank - can help reduce
costs and increase sales.”
We’ll delve into each of these characteristics in greater detail later
in the book.
BIG IS BETTER (USUALLY)
Although you can occasionally spot a diamond in the rough among
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