Starbucks Corporation (SBUX), Chipotle Mexican Grill, Inc. (CMG): What’s Your Investment Philosophy?

Again, that can be different for everyone, but it’s certainly worth looking into to understand, again, what really matters to you when that’s concerned.

Then following that, the third point is to find a catalyst. I like to see a catalyst — either some kind of a short-term event that may be playing out, or a long-term trend that is going to play out for many years to come.

There needs to be a reason why this company is going to stay relevant, is going to matter as an investment. You don’t want to invest in something that’s just going to sit around there and do nothing. You want to play into some kind of a long-term trend, whether it’s e-commerce or whether it’s the proliferation of a Starbucks Corporation (NASDAQ:SBUX) around every corner, or Chipotle Mexican Grill, Inc. (NYSE:CMG)‘s magic formula and the burritos that they make, or whatever it may be.

Playing into a long-term trend or some kind of short-term catalyst I think gives you reason to believe there’s going to be value created over the course of time as you invest in that company.

Then finally, I just want it at a fair price. I’m not a value investor. I’m not a growth investor. I don’t feel like price doesn’t matter — price matters to me very much — but I also don’t let it necessarily dictate whether I will or will not invest in a company.

Price matters, and understanding what the price of the stock is today, what are the assumptions that are leading to that price, is that a price that seems reasonable? Will it offer me an opportunity to recognize some gains in the future? I think that understanding the price does matter, and I’m just looking for a fair price.

To me, that’s just how I look at things. Those are the four steps, the boxes that I check as I go along and look at the investments.

Rick: It’s a nice, simple guideline. I like that there’s four boxes to check, but I think you can unpack each one of those and there’s a lot there.

Jason: Yeah. Yeah, you definitely can.

The article What’s Your Investment Philosophy? originally appeared on Fool.com and is written by Jason Moser.

Jason Moser and Richard Engdahl both own shares of Chipotle Mexican Grill (NYSE:CMG) and Starbucks. The Motley Fool recommends and owns shares of Chipotle Mexican Grill and Starbucks. 

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.