Raising money through the Stock Exchange
There are two types of people who buy shares on a Stock Exchange: “Owners” and “traders”. The people I call “owners” are those who buy shares with the mindset of an “owner”, and a partner in the business. These people see each share they buy as representing a “stake” (part ownership) in the company. For them it does not matter that they own just 100 shares, in a multibillion dollar company; they are “owners”.Before they buy shares, they start by looking carefully at the company, its founders (if they are still around), and its managers. They are interested in everything about the company, including its history and the values of those behind it. They study financial statements, and read up about the business, and its activities.
Once they buy, owners are there to stay. They follow the business, not the share price. They are with the company in thick and thin. If there is a meeting of shareholders they pitch up, and participate.
I remember a woman who had a hundred shares in our company, who once stopped one of our vehicles, and shouted at the driver saying to him, “I’m Mr Masiyiwa’s partner,and I’m going to tell him to get rid of you, for reckless driving!”
“Traders” on the other hand, are buying and selling, all the time. They do not read , or even try to understand financial statements; preferring rumours. They do not follow the business but the market. Sometimes they don’t even know what companies they have bought shares in. They have all sorts of formulas and theories about what “moves the market”. They are also the mainstay of some Stock Brokers, because that is how many stock brokers, make money: they need people who are constantly buying and selling, and also panicking!
Whilst I’m not there to pass judgement on what you decide to do with your money; the key thing to understand is personally, when I write about Stock Markets, and investors, I’m talking about those who buy shares to INVEST, and become an OWNER in a public company.
If you want to make money as a “trader” on the Stock Market, you need to train to become a professional at it. And certainly I cannot give you any advice, because I have never traded in shares; I buy as an “owner”.
Personally I find “trading” in shares a risky business. I prefer to be an owner of shares in companies. I do not find it risky, and I consider it one of the best, if not the best form of investment.
