Trade The Journey

Trade The Journey

The Company Story!

Everyone has a story and who doesn’t like to hear a story? A great story keeps our interest and leaves us with positive vibes. In a great story, the hero wins and the villain is defeated. In the stories we tend to forget or leave with a negative feeling about, what is it about those stories that cause us to do so?

I think bad stories tend to be unclear, lack enthusiasm, and portray a less than positive outlook of the future.

When I hear about a companies valuation, the first step I like to take is in learning about their story. As a new employee whether you know it or not, you are being indoctrinated into the companies story. Each company has a story of where it begin, where its going and where it will end.

I’ve been a new employee more times than I like to admit and the first memory I have when joining a new company is in learning their story. Usually, if you are lucky, you come across the experienced employee who is quite knowledgeable of the companies beliefs, strategies, strengths, and weaknesses. He/she has seen the company in its growing stages, prosperous stages, challenging stages and maybe declining stages.

They know the story, and often times their ultimate goal is for you to believe in the story as well. The companies hope is that you believe in the story well enough to do your best and contribute to the companies ultimate goal of profitability and success.

How does this relate to investing?

Well like most, I am sure that you have seen some good stories and some bad ones. You probably have become quite skilled in identifying them and know when to exit and when to stay. Using this knowledge to identify companies you’d like to invest in should be your utltimate goal.

Ideally, we should be able to both explain the story of the company we have chosen to invest in, to a child. The excitement about the company should be there and the understanding as well. When we know why we like the company and why it should be able to grow profitability, it should be a little easier to invest.

Before you invest, ask yourself about their story. Do you believe their story? Are you able to follow their story? How well are they telling their story? And most importantly is it a true story?

There are some of the things I think about before I decided to invest.

If you have other strategies, what do you look for before you invest?

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