the real fundamentals - IV

are all fundamentally sound companies good for investing?

lets see an example.

lets consider a sugar company which is fundamentally all ok.

is it a good idea to invest in it?

especially, when more and more people are becoming health conscious

and are realising the importance of reducing the sugar intake?

when more and more people are starting to use low-calorie sugar substitutes?

when the farmers are becoming more and vociferous in their cost of produce?

so?

what do you feel?

will you still INVEST in a sugar stock

except for DIVIDEND?

what if you have the choice to invest in a company which makes sugar-substitute?

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what's the lesson?

fundamental strength is not something to go ga-ga about!

fundamental strength is a hygiene factor these days.

a company has to be, i repeat, HAS TO BE fundamentally good

to qualify for our attention.

but to win our money for investment

it has to be much more than "fundamentally good".

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it has to have "growth" written on its forehead.

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now what if

the sugar company decides

- to spread its geographical reach?

- to integrate vertically - e.g. grow its own sugarcane, make sugar concentrates, make candies etc etc?

- to enter hi-refined sugar segment?

- to come out with "low calorie" sugar?

that's growth....and now it qualifies to be taken seriously.

otherwise, it is good for trading only.