Why it’s better to invest in stocks rather than buy a business
March 6, 2011 Leave a comment
The following is a repetition of material found here https://wealthymatters.com/2011/03/06/the-dhandho-investor/ . But I think the material is significant enough to bear repetition.This is a list of reasons why a Dhandho Investor who wants High Returns but Low Risk should prefer to buy stocks rather than businesses.
I am rather indiscriminate when it comes to businesses.I would rather make money from a whole bunch of businesses rather than content myself with one source.And as the Indian economy explodes and money is made in so many different ways it’s so hard to pick just a few businesses to focus on or to put money in.The list below is my way of consoling myself for all the businesses I will never own.
- With an entire business, you have to run it, or find someone who can. To be successful, this requires an enormous amount of dedication.
- In the stock market, you’re buying a business that is already staffed, yet you still get to share in the earnings.
- With whole businesses, often the sellers know a lot more about the business than the buyers, and furthermore the prices offered are not usually as attractive as they can be in the stock market. Read more of this post
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