{"id":18881,"date":"2019-09-15T09:57:07","date_gmt":"2019-09-15T08:57:07","guid":{"rendered":"https:\/\/traders-paradise.com\/?p=18881"},"modified":"2019-09-15T09:57:07","modified_gmt":"2019-09-15T08:57:07","slug":"how-to-profit-by-investing-in-bad-companies","status":"publish","type":"post","link":"https:\/\/traders-paradise.com\/magazine\/2019\/09\/how-to-profit-by-investing-in-bad-companies\/","title":{"rendered":"How To Profit By Investing In Bad Companies"},"content":{"rendered":"

2 min read<\/em><\/p>\n

\"Profit<\/p>\n

You don’t believe it is possible. Profit by investing in bad companies sounds pretty stupid and naive. But it is possible.<\/span><\/p>\n

To be more precise, sometimes it is possible to make notable investment returns by buying the stocks with minimum chances. The key is to recognize the companies which will grow in the future.<\/span><\/p>\n

There is some math behind. The point is to make a difference between business and stocks.<\/span><\/p>\n

Let’s be more clear!<\/span><\/p>\n

For example, you have some money aside and want to invest in some cheap stocks. But you find two similar companies in the same industry, say gold.\u00a0<\/span><\/p>\n

Company ABC is a large one. Gold is currently at $100, its exploration and other costs are $60, that is a $40 profit. Not bad.\u00a0<\/span><\/p>\n

Company XYZ is a disastrous business. It’s exploration and other costs of $90, which is only $10 in profit at the current gold price of $100.<\/span><\/p>\n

Which one to choose?<\/span><\/p>\n

The logical answer would be ABC but the wrong one.<\/span><\/p>\n

Let’s assume the hypothetical situation.<\/span><\/p>\n

The price of gold suddenly rise in the market, and the current it is $300, for example.\u00a0<\/span><\/p>\n

Let’s see the numbers for those companies.<\/span><\/p>\n

 <\/p>\n

Company ABC offers $240 in profit.\u00a0<\/span><\/p>\n

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