basics of stock market investing
basics of stock market investing
5/14/2009Many people who view this site are people that are trying to time the market to make money like traders. They are always looking at volume and treating investing as if it were numbers bouncing around on stock exchanges and charts instead of thinking about the business or the value that they are actually buying. One of the basics of stock market investing is looking at other successful stock market investors of the past. If you look at Warren Buffet Whom was the most successful of all time, you will find that he never was looking at volume or charts much, but rather the business itself. You really should NEVER look at a stock chart again for the rest of your life if you are into investing; at first I know this is very hard for people to do. I know a lot of traders and people here think what I just said sounds insane, but if you never look at a chart again and always ask yourself just one question “is the company that I am buying a good company for its price listed?” If you just ask yourself that one question you will be far more successful in the future even if you are a short term trader. Many times a lot of the greatest companies out there are going for a discount, you just have to find them. If you have truly bought the company at a discount price, and the company continues to succeed then eventually you HAVE to make money because the stock price will go. Hey, let’s face it, there are a lot of goons on Wall-Street that can speculate the price of stocks up or down where they shouldn’t be, but this never works for the long run because eventually a stock will meet its value price. Wal-Mart is a good example of that, its stock price has leveled out but it has almost always at least till the date of this article, gone up more in value for the general future. One of the things that I tell people, is they should is think of buying stocks the same way bankers’ loans money for the long term.
practical stock investing
Even though most the time people are not loaning the company money, but rather buying shares from another investor, the psychology changes when you think of buying shares as a banker would. If you are thinking of buying a company as a banker, you want to know how many assets are backing that company and how much book value you are buying with each dollar you loan. You don’t want the company you are loaning money with to be in a lot of debt with other people or companies out there. You also don’t want the company to be bad with money to start out with. The companies you buy need a track record for handling money well etc. etc. When you start to think about investing like a banker would, the basics of stock market investing become much easier – Just think about the stocks you buy as a company you are loaning money too. What advantages do the companies that you buy have in the market, and are you getting them at a reasonable price? When you think about these rules, you are grasping many of the aspects of practical stock investing.
collective investing hurts the basics of stock market investing
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