Turn Your Daily Habits into Winning Investments

Most people have a daily routine. It could be as simple as brushing your teeth in the morning or enjoying a hot cuppa coffee for breakfast.

Thing is, within your daily habits, it may be worth slowing down a little to notice the products which you use every day. If you do notice, it may be the first step toward discovering a winning investment for the long term.

Low priced, everyday items

To be sure, what we want to look for are low priced items that needs to be replaced frequently. Here’re some examples from the Motley Fool’s own book Rule Breakers, Rule Makers to start you off:

“Our brand of Rule Makers [companies] relies heavily on the sale of goods and services to an enormous audience of buyers who automatically return every month, week, or day with open wallets.

Soft drinks and bottled water, razor blades and toothpaste, chocolate bars and aspirin, toll booths and taxes — they’re all necessary and regular cash outlays for hundreds of millions of people around the world.”

At the local front, a company like bakery operator BreadTalk Group Limited (SGX: 5DA) may fit the bill. The firm’s namesake BreadTalk bakeries provide an affordable daily breakfast to droves of customers every day, similar to how its popular Din Tai Fung chain of Chinese restaurants can warm the stomachs of large crowds of diners.

With a network of over 800 outlets in 16 territories , it would be safe to say that BreadTalk Group does not rely on any one customer alone.

The repeatable nature of its products can provide a steady source of revenue as shown in the graph below.

Breadtalk Revenue Chart

Source: BreakTalk Group’s Earnings Report

Foolish summary

The discovery of businesses with low priced, everyday items is not the end of our quest for a winning investment. Let’s go a step further.

Previously, I highlighted two financial figures which Foolish investors may want to look into: the gross margin and the net margin. If we are able to find a combination of a repeatable business with gross and net margins that are both healthy, we may be close to finding a share that we can hug for the long term.

Stay tuned for more thoughts in the coming weeks. Fool on!

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.