Secret Millionaire's Club

Notes:
Characteristic of investment in 'durable competitive advantage'
1. People want to use your products
2. The business requires little upgrade (or upkeep)
3. You are free to re-invest profits
4. Best to re-invest profits into advertising, to create brandname and emotional attachement
5. Emotional attachment creates the competitive advantage
6. Business run by able and honest management
7. Purchased at a fair price

Think about Milo versus Ovaltine. These 2 similiar products have vastly different market share in Asia. Milo has a larger market share probably due to its strong advertisement and sponsorship of events. People associate sportsmanship and healthy young people running and jumping with Milo, but no such images are associated with Ovaltine.

Nestle Malaysia, which owns the Milo franchise in Asia, which in turn is owned by Nestle (Switzerland)has return on equity above 60% without undue leverage. Investors recognises the superiority of Nestle Malaysia, that is why the stock is trading at a PE of above 20x and PB of almost 14! That's why POINT 7 is important.

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On a seperate note, I met a director from TSMP law corporation today. Amazing lady. Super sharp and smart. Love the advice she gave me; remember to have integrity, this industry is small and everybody knows everybody. You may make some money and get away with it, but by losing your integrity you'll miss out a lot of big opportunities. Don't cut corner. There will be temptations, don't lose yourself if you want to be in this profession (i guess she meant finance/banking).