WHAT WE’RE READING THIS WEEK

American billionaire Bill Ackman has built one of the world’s most successful hedge fund management companies based on eight investment principles. Ackman has eight principles that determine when to invest in a company.

The business must be simple and predictable

The company must be free cash flow generative

It must have a dominant market position

There must be significant barriers to entry for competitors (MOAT)

There must be a high return on capital

The company must have limited exposure to extrinsic risks they can’t control

The business must have a strong balance sheet and not need access to outside capital to survive

The company must have an excellent management team and good governance

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