Lesson 3
The moment people buy a stock, they expect it to double soon. They see the stock ticker 10 times a day. They call their broker a couple of times daily to find out what is happening.
I have one question for such people. Can you set up a steel plant in one day? Can you build a power plant over the weekend? Can you start a mobile company and expect to have 1 million customers on
Day 1? No.
Businesses take time to set up, acquire customers and generate profits. Only when the companies increase their profits will the share price also increase.
Therefore, having bought a good business and good management, give it time to prosper. If you don’t have the patience, you might as well go to a casino or call-up Shah Rukh Khan at KBC.
Moral: The stock market is a serious long-term business, not a make-money-overnight casino.
Saturday, November 15, 2008
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