If you just started your investing journey
You may be tempted to think that just because you are a customer of a company, you know its true value. However, stop and think for a moment. Just because you’ve experienced stellar service or have experienced bad customer service, doesn’t mean that your individual experience is indicative of what has happened with other customers.
Every customer’s individual experience is subject to variation, this is because a company’s supply chain naturally creates output variation.
The best way to know if a company you like is a worthy investment is to combine your general experiences you had interacting with them and with their numbers. Look at their fanatical statements.
Try to gauge how much future revenue and profit they will gain. How are they fairing the public eye? Who is their competition and are they losing market share? Also, try to get information on their supply chain. Who in their ecosystem are they dependent on? What can you learn about these other companies? Can you invest in them as well?
If at the very least all you do is consider the possibility that it is unwise to gauge the value of a company based on your individual experiences, you’ll be in a better position as an investor. Also think about how their supply chain works and how it affects all of the customers involved, not just you.
If you then begin to do the homework, the real gritty research, you’ll be surprised by what you learn (not only about the company but, also about business overall).
Image credit: Unsplash