How to recognize a great business

This information will be most useful to inexperienced investors who aren’t sure what to look for when searching for investment opportunities. For the most part, I suggest passive investing to these types of people, but for those who want to learn more I have found a well written article that covers some important basics.

Advice in this article includes examining the industry anddetermining whether there is demand for the company’s products and/or services and if that demand is sustainble long-term.

There’s also inofmration on how to look at a company’s financials with explanations of price earnings ratio, price earnings to growth ratio, gross margin, return on equity, and debt to equity ratio.

One Response to “How to recognize a great business”

  1. Scott says:

    Hi James,
    I like your blog! I especially like the Motley Fool article and the article on how to recognize a great business. I have some of my own ideas about stock valuation posted at my blog, Stock Market Plus. Come check it out if you like & keep up the good work!