Why we care so much about cash flow

Hey Streitwise, what’s with the obsession with cash flow?

When we look at investments, the first question we ask ourselves is not “How much money can we make on this one?

The first question, without fail is, “How much do we stand to lose if the world goes unpredictably sideways (like a pandemic)?

And that, alone, is why we care so much about cash flow.

What’s the most expensive thing you own, your house? Your car? You probably know what it’s worth today. Chop 9% off that price and internalize how it would feel if you had to sell it at that price today. Pretty bad, right? Imagine how good you would feel if instead you could take that kind of hit and still walk away whole.

That’s why we care so much about cash flow. It’s not about the upside, it’s about resilient investments and living to fight another day when the environment is not as permissive about mistakes as it is today.

An example of a cash flow analysis