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I invested in stocks for a while and thought the same way: "Ah, but stocks will bring me to the Fastlane" - nope. Never was, never will be & never should be.
I only invested in stocks because they should have an intrinsic value - crypto has no use except for the black market. But my experience of stocks vs business? I've found making a business to be so much more straightforward.
Perhaps if you're in microcap, you'd make a sizable return, but the main problem I had with investing was that you'd get into wraps with SO MANY factors for a silly 10% gain on your £1000. You'd do hours of research & predictions to have a factor come out of left field or the management being plain stupid.
Great things about businesses:
The only form of investing that makes sense to me is dividends with a lump sum.
I only invested in stocks because they should have an intrinsic value - crypto has no use except for the black market. But my experience of stocks vs business? I've found making a business to be so much more straightforward.
Perhaps if you're in microcap, you'd make a sizable return, but the main problem I had with investing was that you'd get into wraps with SO MANY factors for a silly 10% gain on your £1000. You'd do hours of research & predictions to have a factor come out of left field or the management being plain stupid.
Great things about businesses:
- you don't have to listen to whatever the FED farts, or what XYZ analyst is babbling about or the hundreds of sell-side analyst sheep. You don't go around in loops of "What's my diversification split?" or "Mmm, should I sell or buy because it's XYZ price??"
- Value creation is easier. You can implement new products/features/marketing/value skews and immediately generate value. A stock certificate sits there and looks pretty.
- Most importantly, you can provide FAR MORE VALUE & hence the return is greater. 20% is an AMAZING return in the stock market. That's great if you have +£1mil to play around with, but if you're starting, a £100 gain doesn't move the needle for Fastlane. Multibaggers are rare in stocks and are only maybe 2x/3x. A good business can easily do that.
- Sell-side analysts are biased to put a buy rating on stocks because they benefit from your transactions.
- YouTubers sell their private investing community with no track record of actual returns.
- There are all sorts of crappy investing courses.
- There are a lot of CEOs who will serve up cool aid for you to drink & fleece you of your capital.
The only form of investing that makes sense to me is dividends with a lump sum.
- Pick a boring company (can manufacturers, soap detergents, real estate) - make sure an idiot can run it because, at some point, it likely will be one.
- Get a 5% dividend yield alongside some stock appreciation, and then have those companies pay you a salary from your lump sum.
- These companies are so dull that they will likely be pretty constant. Therefore, they don't have any stress about what happens. Your principle is more protected, and you can skim a dividend if you wish.
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