Learn how to make more money in stocks with wide economic moat businesses.

Seven types of competitive advantage are analyzed.

Having a competitive edge, allows for a company to have a degree of predictability.

As a stock investor, you are looking for, not only sustainable growth rates, but also consistent growth in cash flow, equity and sales over a 5 to 7-year period of time. With increasing cash flow, profitability for both the business and you the stock investor arises.

Here are seven types of economic moats to look for in a potential business:

A Brand — is a product or service you’re willing to pay more for because you know and trust it. Companies like Disney and Nike have good brand moats.

A Secret – is a patent, copyright or trade secret that makes competition difficult or illegal. Examples of these companies are 3M, Pfizer and Apple.

A Toll – is having exclusive control of a market through government approval or licensing thus being able to charge a “toll” for accessing that product or service. Such businesses as PG & E, a utility company and Time Warner a media business fit the mold.

Switching – is being in the situation where it would be too much trouble to switch to another provider due to the high monetary and time costs. Microsoft and H & R Block are two good examples.

A Low Price – is where products are priced so low no one can compete because they enjoy massive economies of scale due to a huge market share. Both Home Depot and Wal-Mart are examples of businesses that have used pricing to establish an economic advantage.

The Network Effect – is the ability to quickly dominate a network of end-users by being first in the market. EBay was the first online auction business to dominate the North American market.

A Unique Corporate Culture – is a way of doing business that would be difficult to duplicate in another business environment. Southwest Airlines benefited from this type of economic moat in the early years. The seven economic moats discussed are brand, secret, toll, switching costs, low price, the network effect and a unique corporate culture.

I encourage you to get started today in finding those great stocks that have the potential to produce consistently high returns for you.

Join us today by investing in your education at http://stockinvestingsimplified.com.

Disclaimer: Any information shared on Stock Investing Simplified does not constitute financial advice. Stock Investing Simplified is not a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities readers or customers should buy or sell for themselves. The Website is intended to provide general information only and does not attempt to give you advice that relates to your specific circumstances. You are advised to discuss your specific requirements with an independent financial adviser.

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http://www.124videotour.com (Home business related link, not stock market oriented).

How to pick a penny stock to trade is a short video that introduces you to penny Stock Investing. Penny stocks are risky, so you need to conduct research on your trades, and aggressively manage your portfolio. Always take profits when you can, and try not to get too greedy. Penny Stock Trading works best when you know the company you are trading in, and when you use a reliable alert or trading robot system.

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http://www.stockinvestingprofits.com You will discover how to invest money in stock market . Which includes how to invest money in shares, and how to get money in the market.

Duration : 0:3:39

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http://www.FreeInvestingLessons.com Beginner stock investing lessons and advice showing you how to invest stock. http://www.FreeInvestingLessons.com – Over 30 FREE Stock Investing Videos!

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http://www.ProfitableInvestingTips.com – Value Based Stock Investing

Disciples of stock guru Benjamin Green engage in value based stock investing. Value based stock investing works on the principle that the stock market always finds the true value of a stock, even though that process may take a little time. Popular stocks may be overpriced and lightly followed stocks may be underpriced. However, when the market in general does the necessary technical and fundamental analysis of a given stock it prices the stock appropriately. An easy tool to use for value based stock investing is the price to earnings ratio. Mr. Green and subsequent value investors consider two things in appraising a stock. One is the current price and the other is a fair estimate of future stock earnings. The working assumption in value based stock investing is that an overpriced stock can be quickly recognized by its high price to earnings ratio or, better, by a high price to earnings ratio using anticipated earnings. Likewise a stock with high anticipated earnings may be underpriced as the price to earnings ratio is based upon current reported earnings and not upon the prediction of future earnings. Value investors believe that all stocks will eventually return to their fair market price. As such they sell overpriced stocks and buy underpriced stocks in anticipation of profits.

In value based stock investing investors consider the book value of a company and its earnings, preferably an accurate assessment of anticipated earnings. The formula includes a “fudge factor” of 22.5 and calculates the square root of earnings per share multiplied by book value per share. An average Graham number is 1.5. The Graham number is read like the price to earnings ratio. High is overpriced and low is underpriced. Whereas value based stock investing considers a price to earnings ratio of more than fifteen to be high, a Graham number of one and a half carries the same implication. In picking new winners in the stock market, value investors focus on these numbers. When a market downturn occurs it is often a field day for value based Stock Investing as stocks with substantial long term value are available for low Graham numbers or price to earnings ratios. Value based stock investing seeks to find profit in individual stocks. In addition to stocks with attractive PE ratios or Graham numbers investors look at just what a company does, how well they do it, and how much profit they make, or could make, in the future.

A good example of an attractive stock for value based stock investing might be DDI Corp — DDIC — who design and make circuit boards. Its Graham number implies that it should be priced fifty percent higher. It is mid cap stock which means that fewer analysts follow it than follow large cap stocks causing its promising financials to be overlooked by the market in general. By comparison Quaker Chemical Corp — KWR — is a specialty chemical maker that lost nearly ten percent in the last year but whose Graham number implies a real value of nearly thirty percent more that its current price. This is where knowing what the company does and how it fits into the overall picture is essential for value stock investing. A company whose business will falter during an economic downturn may have a low price to earnings ratio or Graham number but, in fact, may be liable to a lower set of numbers if the current recession worsens. A large cap company may or may not be a good stock investment based on value based stock investing principles. Companies like ExxonMobil — XOM, Freeport-McMoRan Copper & Gold Inc. — FCX, Delta Airlines — DAL, or Hewlett Packard — HPQ may or may not be fairly priced depending upon the state of the economy but they are typically followed closely by many stock analysts so that their market price is typically closer to what value investing considers a fair market value.

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