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From Geoff on Focused Compounding, I have learnt to pay attention to the bargaining power the business has with the parties involved (and that is how I judge how well I understand the business). As well as the positioning of the business in it's industry (how much change occurs - how often market share changes, etc).

Do you think of stuff like this in the background as well?

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Thank you for sharing your work.

When you think of risk/reward. Is this what you mean?

Risk

I assume by risk you mean permanent loss of capital or not losing much if things do not go well for the business. So I guess Scenario 2 at worst hopefully.

Reward

Your reward would be 6% dividend yield and 4% growth (also maybe re-rating?)?

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