‘What makes a good investment?’ is a question that I have been asked a number of times and that I will try and answer in this short post. For a starter, I would like to differentiate between investment and speculation as defined by Ben Graham. The main difference between the two is risk. With speculation, you are making a bet on the future stock movement of a given company, for which you may or may not know anything about (high risk). With investment, you make a calculated analysis of the company’s growth prospect, irrespectively of its stock price (for a starter) (low risk c.f. below). Click to continue »