A trick to find a winning company

In 2008, Warren Buffett had an opportunity to purchase Mars, the candy company that sells Twix, Skittles, and M&Ms. It was a rare opportunity to buy one of the leading candy companies in

the world.

To decide if the company would thrive no matter what, Buffett put himself in the shoes of the competition and asked himself one question: “If I had a billion dollars, could I knock

off Snickers as the leading chocolate brand?”

The answer to that question was a clear “no.” Even if he was a competitor with more than a billion dollars in funding, he didn’t think he would be able to overthrow Snickers.

He went onto buy the candy company for $6.5 billion, and he later told media outlets that his Mars investment was very profitable.

One way to conclude if a company is really good enough is by putting yourself in the shoes of the competition and asking yourself, “could I knock off this business as the market leader if

I had a billion dollars?”

If you’re researching Google, ask yourself, “if I were running a competing search engine and had $1 billion, could I find a way to overthrow Google?”

If you’re researching Netflix, ask yourself, “if I were running a competing streaming service and had $1 billion, could I find a way to overthrow Netflix?”

If you’re researching Apple, ask yourself, “if I were running a competing phone company and had $1 billion, could I find a way to overthrow Apple?”

If you aren’t confident that a company can withstand the competition, you shouldn’t invest in it.