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Reading a Business Like an Owner · Unit 1

Understanding Business Models

5 min read

What this unit covers

Read a company as a business first, by how it makes money, before looking at its stock price.

By the end you will be able to

  • Explain what a business model is in plain language.
  • Distinguish looking at a company as an owner from watching its price.
  • State how a familiar company earns its money in one sentence.

How it starts: The Rising Stock

  1. You see a stock up 18 percent this week and want to buy tonight.
  2. You try to say what this company actually sells, and no answer comes.
  3. You can watch a stock all day and still not know what you own.

Words you will meet

Business model
The plain way a company earns money, what it offers, who pays, and why they pay.

In this module: Reading a Business Like an Owner

  1. Understanding Business Models (this unit)
  2. Competitive Advantage & Moats
  3. Management Quality & Corporate Governance
  4. Growth vs Risk

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