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in FTSE 100 As we approach the already new all-time high this week, the last thing in some people’s minds might be the prospect of a stock market crash.
However, when investing, you can prepare. When the stock market crashes next, I have no idea than anyone else. But sooner or later, it will happen – and I want to be prepared.
That’s because it’s easy to focus on the fate and darkness of the crash, but it can provide great opportunities for smart investors. However, the window of opportunity can be short, so I think the game’s name is what you’re prepared in advance.
Focusing on discovering great companies
Actually, that means spending my time now looking for what I think is a great business, even if the stock price isn’t appealing to me.
That way, I think future stock market crashes will look good on me, so I can add them to my watchlist in case future stock market crashes become available to me.
For example, yesterday (June 9th) Spectrum Stock prices are rising sharply 70% of DAy, at one point, following the acquisition offer.
Spectris, an instrument manufacturer, is not currently on my watch list, but that made me think of a company like: Rivals Review Scientific (LSE: JDG).
The judges make my wish list. Because I think it has a sustainable competitive advantage, I make my wish list (it doesn’t hurt a series of annual dividend increases of over 10%, but before considering dividends, I always look at the underlying business).
The focus on scientific instruments gives us a continuous source of potential business. Because accuracy is important for such users, they are willing to pay for quality. It gives judges the pricing power.
Taking over small and medium-sized competitors at attractive prices (for example, when a company founder wants to retire and sell his business), the judges were able to build a significant amount of business without spending a huge amount of money.
There is a risk. Spectris’ transactions are a reminder that it’s not just companies that have money to spend on judges. If that pushes up the selling price, it may be difficult for judges to continue growing the way they have done.
I’m waiting for the right moment
But I like the judges’ business – very much.
But what I’m far less is the current stock price of the judge. The current price return of 51 is too high for my comfort.
So, if I had the opportunity to buy them at what I see as an attractive price, I added the company to my watchlist of stocks I would like to own.
The next time the stock market enters one of its regular, sharp declines, I will quickly pull out that list. I’ll check if there’s a rare and potentially a very advantageous purchase opportunity!