Investing in a business only makes sense if you believe it will outperform the market over a specific period of time. According to former Old Mutual fund manager Ashton Bradbury — one of 64contributors to Harriman’s New Book of Investing Rules — this outperformance will come from at least one of the following:
The company will grow profits faster than the market for a long period.
The company is about to be positively re-rated by the market.
The company is likely to deliver a positive surprise to the market in the future, perhaps by reporting higher than expected profits.