Comments on: Business for sale?

By: Adrian

Adrian — Sun, 18 Jan 2009 12:43:03 +0000

@ Carrie – if the absence of debt will make the store more profitable, then ideally you need to find somebody with cash e.g. somebody recently ‘retired’ from the corporate world with a payout that they now need to invest, so run ad ad with headline something like: “Retail Investment Opportunity!”

Run this – or other ads – in the classifieds in the local papers, as the purchaser will probably be somebody from your area … how about the store manager (is that you?) …. would/would you buy it, and perhaps pay the owners out over time?

By: Carrie

Carrie — Sat, 17 Jan 2009 14:19:25 +0000

Help! I am the assistant manager of a party store in a small town. We are filling a niche here, but with the economy, we are drowning in debt. The owners have asked me to find a buyer… How do I go about this?

By: AJC

AJC — Tue, 29 Apr 2008 21:25:18 +0000

@ Jason – The ‘Gold Standard’ in investing is Warren Buffett, from what I understand, he made a lot of his intial money by buying companies at a P/E of 8 … if they return well AND climb to a P/E 15+ … double-whammy!

Real-estate has a HUGE additional advantage: you can leverage MUCH more than stocks. Thanks for your comments.

By: Jason Dragon

Jason Dragon — Tue, 29 Apr 2008 15:04:43 +0000

This really makes me wonder how many companies are worth buying. Most good real estate will pay for it self in 10 years or less. This would be a P/E ratio of 10. And almost every stock I see has a P/E ratio over 10. I think I will only buy stocks in the future from companies with a P/E of under 10 and from one that I like the business and the management.

I don’t think it is real, just made up numbers.

Jason Dragon
http://blog.capitalactive.com/

By: AJC

AJC — Tue, 29 Apr 2008 12:47:42 +0000

@ Jason – I don’t know who the company is … but, an interesting exercise in ‘valuation’. I wouldn’t buy no matter how good the cashflows if I didn’t love and understand the company & its management team … as though I was buying and NEVER planning to sell!

By: Jason Dragon

Jason Dragon — Tue, 29 Apr 2008 07:41:53 +0000

I don’t think that it can be Berkshire, they are not this steady due to losses they had in insurance. Berkshire is not even as good as this company, they are worth almost 200 billion and only spin off 6 billion in cash. Even Warren Buffet said not too long ago that a fair price for his company was probably 60-80 billion.

But this really does make people think about stock in the correct way. You are really buying small parts of a business. This is exactly how Warren, thinks about stock if you plan to hold it long.

I usually find it easier to make money shorting stocks, it is much easier to spot a failure than a winner much of the time. If you look at most large cap companies, their profits are usually less than 3-5% of their market cap.

The funny thing is that I can’t find any company like the one talked about.

By: AJC

AJC — Mon, 28 Apr 2008 14:48:39 +0000

@ Moom – Thanks [how's Aus?] … could be BRK (that’s Warren Buffett’s company). Does that make it an automatic ‘buy’? Some people want their investment ‘returned’ in 15 months, not years

By: moom

moom — Mon, 28 Apr 2008 14:30:03 +0000

Assuming that cashflows will continue to grow then you’ll get your money back in less than 15 years…

I think that is Berkshire Hathaway BTW.

http://www.networthiq.com/people/moominoid

By: AJC

AJC — Mon, 28 Apr 2008 13:49:10 +0000

Hey Q, I can understand why you’d like [Networth] IQ and, it IS a great site! Thanks for posting the link to your own profile, too.

By: Q

Mon, 28 Apr 2008 12:11:14 +0000

Yeah, networth IQ is a great site.

http://www.networthiq.com/people/Qcpu