So how do we protect our wealth without succumbing to the status quo investment approach? That is by taking calculated risk; invest in the companies whose products and services you use, so your real-time “in” on what’s happening with the business is right at your fingertips. You have first-hand knowledge of what the business is doing, and thereby reduce risk, remove emotion, and base your investment on the most important fundamental for any business: Does the product or service work and will I keep buying and using it?
I love to eat. My appetite has made me wander into The Cheesecake Factory Incorporated (NASDAQ:CAKE) more than once. Actually, I eat there quite often because of the fast service and large portions. Every time I go for lunch or dinner, there is a significant waiting time.
What I know about the company is that they have over 160 restaurants called “The Cheesecake Factory Incorporated (NASDAQ:CAKE)” and bring in over $1.8 billion in revenue. It is hard for me to personally dispute the broader financials of this company due to my experience waiting in line for food and watching the volume in this restaurant — and other The Cheesecake Factory Incorporated (NASDAQ:CAKE) restaurants I’ve visited — stay consistent throughout my visits.
Did I mention the food was good? Let’s face it, The Cheesecake Factory Incorporated (NASDAQ:CAKE) isn’t Alain Ducasse or Daniel Boulud, but quality and portions aren’t lacking in comparison to TGI Friday’s or Applebee’s.
So, with the food being something I enjoy, noticeable and steady volume, and widespread reach, I would love to purchase shares in The Cheesecake Factory Incorporated (NASDAQ:CAKE). My investment would be an “ease-of-mind” one at the least, knowing my decision wasn’t based on third party experiences or analysis.
I take cholesterol medication. Although I don’t blame The Cheesecake Factory for my need to take cholesterol medication, it may be a cause as to why I must continue to take it. The drug company Actavis Inc (NYSE:ACT) supplies me with atorvastatin, which has kept my cholesterol to a cardiologist-happy 130.
Thankfully, insurance covers this generic form of Lipitor. The drug has done wonders with my cholesterol in a short amount of time and continues to be my piece de resistance against cardiac problems.
Outside of using the drug itself, I do know that Actavis Inc (NYSE:ACT) (formerly named Watson Pharmaceuticals) generates over $8 billion in sales for their various generic drugs. Additionally, they are one of just two major manufacturers that are currently producing the generic form of the blockbuster Lipitor. If you can recall, Lipitor is the number one best selling pharmaceutical in history, booking in over $150 billion in sales for Pfizer.
So with The Cheesecake Factory and Actavis Inc (NYSE:ACT), I am not only eating well and living well, but also using the two on a regular basis. Knowing this, I can make a wise decision into a pharmaceutical company without having detailed scientific knowledge of drugs and quantitative analysis of future pipelines. I know for as long as there are unhealthy Americans, Actavis Inc (NYSE:ACT) will sell a valuable product, keeping my investment safe.
