20 Erb St W
- Portfolio Management for High Net Worth Clients ($1Million+)
- Business Perspective Investing
Business Perspective Investing
The wrong reason to own a stock is because you think the per-share price is going up next week, month or even within a year for that matter. Think of it this way; if you were looking to invest in a business or real estate investment and I were to offer you a local business, franchise or a local apartment building you would look at the accountants books and determine how much money the business is making, how consistent the profits are, the future economics behind the business and of course at what price to determine your rate of return. If it makes sense and the business is attractive based on future returns you would make an investment in the business.
We must look at stocks from the same business perspective as buying an entire business and make our decisions to invest in an ongoing business venture for the longer term – like a business owner and not like most "investment professionals” by the short term.
Warren Buffett is right
Warren Buffett is right when he says you should invest as if the market is going to be closed for the next five years. The fundamental principles of value investing, if they make sense to you, can allow us to survive and prosper when everyone else is rudderless. We have a proven map with which to navigate. It sounds crazy, but in times of fear and selling in the markets, we should feel a sort of serenity in knowing that if I have checked my work and rechecked my work, one plus one still equals two regardless of where a stock trades right after we buy it.