Why would you pick a particular business when investing?

what reasons affect your decision when selecting the companies you invest with?

homework reasons :)

A few real-world (and homework) reasons to invest in a particular business include the following:

(1) Familiarity. I will usually invest in a company with which I am familiar and will usually avoid companies with which I am not familiar.

(2) Rank. I will usually invest in a company with ranks among the largest of its type -- ranked by sales, assets, profits, employees, etc -- and will usually avoid smaller companies, simply because of the uncertainty associated with small size.

(3) Age. I will usually invest in established (i.e. older) companies rather than newer ones, simply because the more established companies have a track record (history) which can be evaluated.

(4) Trend. I will usually invest in companies whose sales, profits and assets are growing (trending upwards), rather than those which are trending flat or downwards.

(5) PE Ratio. I will usually invest in companies with a low price-earnings ratio, because the price is low relative to the earnings. I will avoid those with a high ratio, since those companies -- even though they may be really great companies -- are too expensive for potential future growth.

(6) Management. I will always invest in companies which have strong upper management -- as measured by my own evaluation and by the "street's" evaluation -- since management will win out every time. I will avoid companies which have questionable or poor management, because, no matter how strong the company, less-than-stallar management cannot succeed in today's highly competitive environment.

Other factors which I consider include employee relations (I will not invest in companies with a history of employee or union problems), social responsibility (this is too important today to be ignored), and jurisdiction (where a company is headquartered and does business affects its success in so many different ways).

Hope this helps.

I like to see their chart trends for the last 5 years and read the quarterly reports regarding order books etc. During the recent crisis I made an investment and happy to see 15% profit for 2 months