Invest in businesses with strong cash flows from "summary" of Buffettology by Mary Buffett,David Clark
When choosing which businesses to invest in, Warren Buffett looks for those with strong cash flows. This is because cash flows are the lifeblood of any business. A company can have all the sales in the world, but if it doesn't generate cash, it won't be able to survive in the long run. Cash flow is what allows a company to pay its bills, invest in growth, and reward shareholders with dividends or share buybacks. Businesses with strong cash flows are able to weather economic downturns better than those without. When times get tough, companies that generate consistent cash are able to stay afloat, while others may be forced to cut costs, lay off employees, or even go out of business. This resilience is a key factor in Buffett's investment strategy. He wants to invest in companies that have a proven track...
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