Warren Buffett's Consumer Monopoly Investments

By Author: Alex Carlson
Total Articles: 465
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According to the famous book, Buffettology, Warren Buffett looks for companies to invest in that he considers consumer monopolies. The companies usually have most of the following characteristics:

The company show strong earnings with an upward trend for the past 10 years or so
The company usually has a strong brand name with good consumer loyalty
The company is conservatively financed and holds little debt. So it is prepared for setbacks and opportunities if they present themselves.
The company must earn a high rate of return on shareholder's equity
The company must be able to retain earnings and not have to spend it on current operations

Consumer monopolies tend to experience a large increase in long-term economic value. The trick for Warren Buffett is to find the consumer monopoly at a discounted price and then he holds the stock for long periods of time letting the earnings and growth compound year after year.

While most investors are short sighted, buying on good news and selling on bad news, Buffett takes the long view and it has made him the richest man in the world.

Alex Carlson

http://www.shortoncashflow.com

Consumer monopolies, investors, Stock Investment.