A
Stock is a slice of ownership in an underlying business. The Stock Price is not
it’s value. It is the amount agreed between the last buyer and seller to swap
money and ownership. Very different from if the entire business was sold, but a
reasonable guess if you wanted to sell now. If someone offered you a fraction
of the value of your home, you’d laugh them off. You prefer to remain an owner.
Same deal here, except homes aren’t sold by the brick. The main aim is not to
be a Forced Seller. When someone offers you a ridiculous price, and you have to
take it because of external demands. Because you need the cash. Being a long-term
owner means you need to have a buffer for short term shocks. Shocks that have
nothing to do with the business and everything to do with immediate needs. You
need to be able to cover the Basics. Markets function best when everyone is
calm, informed, empowered, and making decisions based on all the information
available. Willing buyer. Willing seller. There is seldom a reason to rush,
even in the centre of chaos. Breathe. Don’t force it. This too will pass.
pic by: Ben Molyneux
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