Is This Business Worth Owning?
A simple, beginner-friendly way to tell strong businesses from weak ones—before you ever look at the stock price.
Hey there,
If you’re joining me for the first time, let me catch you up…
Last month, I gave everyone free access to something I call: The 5-Week Wealth Builder Challenge. It transformed beginners with no investing experience into investors who can:
Build a clear investing plan
Choose realistic timeframes for goals
Buy a stock at its absolute best price
And protect their money with simple risk principles.
It was a success, but it wasn’t perfect.
I listened to feedback and realized that, aside from the investing plan you built in week 1, every skill you learned is only helpful once you know which stocks to invest in.
But if you don’t know how to pick the right companies in the first place… what’s the point?
That’s why I’m doing another challenge, completely free, all about fundamentals. And the first thing you’ll learn is how to answer a question that every real investor asks: “Is this business worth owning?”
Is This Business Worth Owning
I, and every investor I have ever respected, always start by understanding a company’s business before asking about its stock price—price is just an afterthought.
Consider this:
What does this business sell?
Who do they sell it to?
Can they still sell it hand over fist 10 years from now?
If you can answer those three questions clearly, you’ll have a better understanding of whether or not this business is worth your investment.
Want an example of how this works?
Amazon sells everything, literally. Even cars.
They sell it to everyone—you, your mom, small businesses, Fortune 500 companies, etc.
In 50 years, individuals, small businesses, and Fortune 500 companies will likely need more of what Amazon sells (data show that as the population grows, so does consumer spending).
See how that works?
Now contrast that with companies that sell products people don’t need anymore, like GameStop. On a stock chart, businesses like that might look like a “great deal” because it’s affordable, but underneath all the unworthy hype, the fundamentals are shaky.
💡 Pro tip: Investing is about owning stocks of great and growing businesses earning profits year after year, not stocks of any business just because it’s affordable.
Action Steps You Can Take Today
Pull up a company you’re interested in and ask yourself:
Can I explain this business in two sentences?
Do people need it, or do they want it sometimes? (If they need it, who’s paying for it?)
Will this company still make sense 10 years from now?
If the answers aren’t clear, it’s alright to pass on the company. That’s called being selective—and you want to be very selective with where you invest your money.
“Never invest in a business you cannot understand.”
-Warren Buffett
What’s Coming Next
Next week, we’ll take the second step and answer another question: “Is this company financially healthy?”
Don’t worry, I won’t drown you in numbers. I’ll show you a quick, beginner-friendly way to spot strong businesses.
Until then,
✍️ Isaiah from Earn Out Loud
P.S. If you aren’t a PRO subscriber yet, but want to join Thursday’s lesson, join us by upgrading here: https://earnoutloud.substack.com/subscribe
Solid framework here. The GameStop vs Amazon comparision really drives home the point about durability. I've been burned before chasing 'cheap' stocks without asking if people would actualy need the product in 5+ years. The two-sentence test is gold for cutting through complexity, especially when companies try to obscure their core business with jargon.