How to pick good stock?

Just read a good and interesting blog post today about How to pick good stock? The original article is written in chinese. >>Read original

In essence, the author list down six types of company competitive advantage.

1.Monopoly. It is easy to see why. Because you can only get the product/service from this company.

2.Resource advantage. The company that is close to key resource needed for the manufacturing process would have unfair advantage over others.

3.Brand. Brand itself is not enough, you need a strong brand. Warren Buffett called it a consumer monopoly. One would not bother the goods/service is slightly more expensive than others. This is also one of my most used stock selection criteria.

4.Strong capability. The company's technology and capability is simply superior than others.

5.Special protection. Some company's product received special protection from government.

6.Industry advantage. Some industries are less cyclical than the others. Some because of the industry dynamic would not be able to earn lots of money. Take the example of local IT company, the competition is intense and the price is dirt cheap.

Next time, when you buy your next stock, remember to think through what is the unique advantage that it holds. When I first started investing, I would spend time to analyse the financial statement etc. Nowadays, I just quickly glance through. As long as the company has low debt, good cashflow position and strong product/service, the chance of going down is quite slim.
The key point is the company key competitive advantage and industry outlook.