How 'bad profits' can poison your investments

Investors are usually urged to put their money into companies that are growing profits. But not all profits are created equal, says Bengt Saelensminde. Here, he explains how to tell good profits from bad.

It seems I stirred up a bit of a hornets' nest recently. So what exactly caused this reaction...?

Well, I said that you shouldn't trust goodwill on company balance sheets like Connaught's. That's because goodwill is an asset that can't be sold and you can't use it as collateral if you suddenly need to borrow some cash.

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Bengt graduated from Reading University in 1994 and followed up with a master's degree in business economics.

 

He started stock market investing at the age of 13, and this eventually led to a job in the City of London in 1995. He started on a bond desk at Cantor Fitzgerald and ended up running a desk at stockbroker's Cazenove.

 

Bengt left the City in 2000 to start up his own import and beauty products business which he still runs today.