I strongly believe that moat as a concept is somewhat illusory. All businesses tend to become commodity after a point, when more and more competition sets in. Look at the business history over a 100 year period and you will find it very difficult to find companies which have sustainable business advantage. A case in point is newspapers. Even the great and venerable Warren Buffet used to think that his holding in Washington Post to be a bullet proof investment because in his own words "You can't beat a good newspaper business franchise". However, 50 years down the line Washington Post is struggling to make money. Times change, consumers change, preferences change. As in life, there is nothing permanent about business, other the promise of change.
The first step to any long term investment plan is to understand where we are at present. So, to start with you need to list down your existing networth. For example, you can have a list as follows: Provident Fund 100,000 PPF 50,000 Bank FD 50,000 Mutual Funds-Equity 150,000 Mutual Funds-Debt 50,000 Cash In Savings Account 30,000 House 2,000,000 Housing Loan -4,000,000 Others 0 Total -1,570,000 A couple of things to note here. 1. I am not calculating the value of any gold/silver jewellery that you may be having. Indians, typically are not very keen on selling their family gold/silver so it really does not count as investment. You can think of it as an additional bonus if you do have gold/silver. 2. I am including the housing loan you may have as a negative here under the assumption that that is your primary home and not a second home bought for investment purpose. Also, I am ...
Comments