Wednesday, June 13th, 2007
Four secrets of picking great growth stocks
Charles Kirk linked to an interesting article by Fred Kobrick on picking great growth stocks.
Kobrick, who worked for State Street, says investors should focus on just four factors, which he dubs ‘BASM’, when looking for buys:
Business Model: How the company plans to grow, be profitable and protect itself from competitors.
Assumptions: The key assumptions the company makes about their markets upon which they then develop the business model.
Strategy: This is simply the plan the company develops to implement the business model.
Management: These are the actual people who create the great business models, assumptions, execution and all the rest. Great management is also needed, over time, to adjust business models for competitive situations.
Kobrick says that, after hearing about BASM, most people ask: what about earnings? He says that earnings growth is a result of these four factors.
Interestingly, based on the BASM criteria, Kobrick says eBay is a more attractive investment than Google, despite the latter’s amazing share price gains.
Word Count: 157. This entry was posted on Wednesday, June 13th, 2007 at 10:27 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
July 3rd, 2007 at 4:45 am
Great article. To get the whole picture you need to read Mr. Kobrick’s book, “The Big Money.”