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I don't think you should trade stocks but buy companies instead. I think there's a mental shift in between stocks & the market and investing in a company. Own
by yason 13y ago
I don't think you should trade stocks but buy companies instead. I think there's a mental shift in between stocks & the market and investing in a company.
Owning companies existed before stocks: stock markets grew to add easier funding and liquidity of ownership but I think that these days the markets are way more detached from the actual business the companies are doing than before.
It's my perception that those who buy parts of a company aren't generally interested in the stock market. You could as well buy part of the company privately and there would be no stock market for that particular company. If your calculations say it's likely to be a good investment for you then that holds even if the company is public.
What the stock market seems to provide is lots of noise. You generally don't want to hear any of that. I think that when you do your research on interesting companies, some companies light up, and then you should start investing in those companies as long as the light is up. If it goes out, then you should start selling the stock. To compensate against the market noise, you should buy in smaller chunks and spread the purchases over a longer period of time: this way you don't need to care as much as about the dips and spikes.
- brazzy 13y ago> If your calculations say it's likely to be a good investment for you then that holds even if the company is public. No, it doesn't because you still have to buy and sell your shares on the stock market, and if you do that at a time when the company is grotesquely overvalued you could end up losing money over a quite long timeframe. And even in a normal case the "noise" of the stock market can easily neutralize the advantages of your fundamental analysis.