The 25 Habits of Highly Successful Investors by Peter Sander

Author:Peter Sander [Sander, Peter]
Language: eng
Format: epub
ISBN: 978-1-4405-5663-0
Publisher: F+W Media, Inc.
Published: 2013-02-14T16:00:00+00:00

HABIT 12

Don’t Forget the Intangibles

Warren Buffett has said many a wise thing about investing but none wiser than this:

“If you gave me $100 billion and said, ‘Take away the soft drink leadership of Coca-Cola in the world,’ I’d give it back to you and tell you that it can’t be done.”

What did he mean by this statement? Simply this: Good businesses have intangible strengths and qualities that simply cannot be purchased at any price. They are difficult, if not impossible, to quantify, reproduce, or copy by competitors in the marketplace.

Moreover, these intangible qualities tend to be leading indicators of a company’s success. You can easily look at intangibles such as brand, market position, customer loyalty, innovation strength, channel strength, and management to determine, at least to a degree, how well the company will do financially down the road. At the risk of oversimplifying, financials are the past, while intangibles are the future.

As you appraise any company as a possible investment, you should get into the habit of examining both the financials and the intangibles that make the company tick.

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