Buying Stocks Equal Buying Business

Yes! I hope Spectra of Life’s readers can think like a ‘business owner’ when you are buying stocks from the stock market.  Whenever people discuss about stock market, usually the topic will revolves around the price of the stock. For example,  What is the price for AA stock now? Do you think AA stock will gain a 20% in price this year blah blah blah. To me this is more of a speculator or simply, a gambler mindset.

Why should you think like a business owner?

Although frankly speaking, you don’t really literally own the whole company when you buy its stock, but you are still a minority shareholder. You share the company success or failure. By having a business owner mindset, you buy a stock for a reason, less of a gambling intuitive. You analyse the company health and weigh it against its pro and cons before putting your hard earned cash in it. Just like how you will look into various brands of handphones and its specification before deciding on your final purchase.

You tend to rely less on greed and fear when buying or selling. You have your reason to enter at a predetermine price because of fundamental reason and would only sell if the company no longer financially sound or you can have better return elsewhere.

For the next post, I will share on the 5 questions you should ask when buying a stock as a business owner. For now I would like to leave you with a quote by Warren Buffett:

“Price is what you pay, value is what you get”

So stay tuned~

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