# What to look for when Long-term Investing



## NewToTheTrade (24 August 2011)

Hi, Im new to the forums and new to trading. I was interested to know what you guys look for when investing long-term, by long term I mean 5+ years.


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## Tysonboss1 (24 August 2011)

NewToTheTrade said:


> Hi, Im new to the forums and new to trading. I was interested to know what you guys look for when investing long-term, by long term I mean 5+ years.




This about sums it up. It takes alot of skill and knowledge to identify each one though.


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## So_Cynical (24 August 2011)

NewToTheTrade said:


> Hi, Im new to the forums and new to trading. I was interested to know what you guys look for when investing long-term, by long term I mean 5+ years.




A good business in a good industry with manageable debt, trading at a low price....some potential to keep on doing what they are already doing and potential to grow.


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## NewToTheTrade (25 August 2011)

thanks, help is much appreciated.


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## McLovin (25 August 2011)

For the business: Good balance sheet (ratio analysis), good margins, low revenue concentration, high return on equity, low CAPEX, strong free cash flow. Ideally I also like companies that have a high % of recurring revenue. And most importantly, a business I can understand. 

For the share: Margin of safety.


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## MrMomentum (25 August 2011)

So_Cynical said:


> A good business in a good industry with manageable debt, trading at a low price....some potential to keep on doing what they are already doing and potential to grow.




When you say "trading at a low price" do you mean undervalued or trading below a certain price e.g.$2 ?


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## So_Cynical (25 August 2011)

MrMomentum said:


> When you say "trading at a low price" do you mean undervalued or trading below a certain price e.g.$2 ?




I mean...trading at a low price when compared to a high price, stocks trade over ranges that change over time and some successful investors use that time to their advantage.


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