Buying a company’s share = owning part of the company
For the past few days, I’ve been busy reading Benjamin Graham’s The Intelligent Investor. This book is said to be “the one book” which every investor should read especially novices like me. For those who don’t know who is Benjamin Graham, he is actually a genius investment guru who is well respected across the globe. He is also one of the mentors of the famous Warren Buffett.
In the book, the author actually encouraged people to change the way they think of a company’s share.
Before this, I would look at it as a paper which costs a lot of money. But that’s a wrong mentality. The author told people, especially newbies like me, to think of the company’s share which has been bought as part of the company. His argument is very true. Owning the company’s share also means you’re officially the shareholder of the company. In other words, you own part of the company.
And now, think of it like it is really your company. Do you start to care about your company’s future and prospects? Are you worried about its financial status or whether the company can last another day?
If you’re worrying all those things, means you’re not confident that your company can hold against the tsunami. Maybe it’s better for you to cut loss and let it go, and use the money to find another company which gives you more confidence.
But if you’re confident your company will pull through this economy crisis, then you must ensure your confidence don’t go from the wrong source. Make sure you’ve done the proper analysis (without proper analysis, how could you say that you’re confident that the company can hold?) and not listen to some George Soros-wannabe market analysts. If you’re 80% confident, then stop looking at your share price every few minutes or so. Be confident that your company can pull it through without a problem.
I’m not sure this change of mindset will help anyone but I know it certainly helps me to think differently because I no longer see myself as a short term “resident” of the company. I now see myself as someone who cares about the company.
Come on IOICORP, you can pull it through !!!
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