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These are exactly my thoughts. Yet, success of an investment depends on price after all, and I feel like I can never be sure whether the current price is an exp
by laserlight 4y ago
These are exactly my thoughts. Yet, success of an investment depends on price after all, and I feel like I can never be sure whether the current price is an expected value of business prospects, is pumped by never-to-be-realized dreams of bozos, or is downright a long-running pump-and-dump scheme. I'm afraid markets behave more like a Keynesian beauty contest.
- twawaaay 4y agoValuing a business is not easy but it is not hopeless. Imagine somebody in your family has a grocery store and asks you to invest in it so that they can expand the business. Do you know them as a person? Do they have track record of being truthful? Frugal with money? Resourceful? Do they have track record of keeping their word and succeeding at projects? Is their store doing better or at least as good as competition? Do their explanations of why they are going to succeed make sense? Do you have some knowledge about running a grocery store? If you have, this can help you a lot with filtering truth from BS. If you do not, maybe it is worthwhile to get at least a little bit of knowledge? While you can't predict the future there is a lot of signs of what you can expect from the person or business and if the investment is significant enough you should make sure to get at least some knowledge in the area. Ideally, you would invest in things you have some kind of expertise.