Last updated: November 16, 2024
You find here the part 3 of the Stock Series by JL Collins.
Notes from MP
I’m no different from anyone else, and I too would have lost money in the stock market by trying to buy when it’s low, and selling when it’s high…
This would have happened if I hadn’t understood what the stock market was all about.
From the moment I started reading and listening to Warren Buffett, I understood that a stock was not “something worth CHF 100 today, CHF 110 tomorrow, and CHF 88 the day after tomorrow”.
No, that’s the definition of the stock market: something completely irrational and emotional.
But a stock is something else. A stock is a share in a very real company with very human employees, all striving to remain competitive and productive in the face of other competitors.
That’s what I own when I buy a stock.
From the moment I understood that, I could imagine myself investing in the stock market — for the long term.
And that I was going to buy AND never sell, without worrying about the market’s ups and downs. Because the ups and downs of the market are due solely to the feelings of people who want to buy/sell pieces of paper and don’t understand much about the underlying companies they own.
I’ll be careful not to say that I know the underlying companies. I leave that part to my ETF, which only holds the best companies. And when it comes to the day-to-day operational management of these companies, I believe that their employees are in the best position to know what to do to move their business forward (compared to the analyses of the so-called “experts”).
I hope you’ll have the same lightbulb moment I did back then, by understanding what the stock market really is, and what a stock really is. This “aha moment” enabled me to “get started into the stock market” for the long term with almost no fear (and amass tens of thousands of CHF in gains for over a decade now).
Photo credits: jlcollinsnh.com