A successful investor is not just one who identifies a good company, but one who understands in advance what constitutes a 'good business'.
They understand which business model is relatively secure and successful, and which business model is risky.
Here are our rules – what makes an interesting business model – and what makes a riskier business model, which we will usually prefer to avoid and stay in the audience stands.
So, which industries are we more afraid to be partners in?
Which types of businesses easily harbor unpleasant surprises?
Here is the personal checklist – some characteristics of business models considered more challenging, which require careful and in-depth analysis before examining them.
On the surface, they look like an opportunity. Good numbers. Strong cash flow. Well-known brands. Maybe even generous dividends.
But when you scratch the surface — the abyss is revealed.
These are industries where even geniuses fail, not because they are foolish, but because the rules themselves are flawed.
1️⃣ Oil and gas — geopolitical casino
Yes, cash flow.
Yes, tangible value.
Yes, dividends.
But what are you really holding?
The result of a barrel price you don't control.
OPEC decides? Boom.
Global slowdown? Boom.
Even if you are a brilliant manager with a perfect well — oil prices drop? You're in trouble.
In short, the company is not interesting, the management is not interesting, it's purely an investment in geopolitics.
2️⃣ Insurance — the imprecise science
It might seem sophisticated.
Statistics. Artificial intelligence. Premiums.
But this whole business is art disguised as science.
One wrong risk assessment or a rare catastrophic event — and the company enters a vortex.
You won't see it in time. You'll only discover it in hindsight — when the damage is already irreversible.
3️⃣ Biotechnology — roulette disguised as science
You're betting on a molecule, on an experiment. On a committee.
And mostly, on luck.
This isn't the stock market — it's a venture capital fund disguised as a public stock.
When it succeeds — it soars.
But in 90% of cases? It's simply wiped out.
4️⃣ Retail — operational hell
Zero profit margins.
Disloyal customers. Unpredictable inventory.
You're constantly on the edge.
Discounts, trends, TikTok, and weather.
This isn't management — it's a survival race.
5️⃣ Aviation — a business of survival
Huge capital. Intensive labor. Endless regulation.
Exposed to oil prices, natural disasters, pandemics, even volcanic ash clouds.
There's no competitive advantage here.
There's no logical investment model here.
6️⃣ Telecommunications — one foot in bureaucracy, one on ice
Heavy infrastructure. Government regulation. Fleeing customers.
A slow, cumbersome business, difficult to change.
Everyone thinks it's the future — but often it's a past that's hard to let go of.
7️⃣ Restaurants — the recipe for loss
Perishable raw materials. Insane employee turnover. Unpredictable customers.
Every delay — a loss.
Add to that price wars, culinary trends, and high expenses — and you get a business someone else should run, not you.
There's an exception to every rule – it's not that there aren't restaurants with high-tech growth, or interesting telecommunications companies, but these are more problematic industries where the entire business model embodies risks for those who examine investments in depth.
In the next post - the other side of the coin.