I often find myself under the impression I am in the entertainment business.
People don´t want to make business like investments, they want to be involved in the latest fad and feel they are living at the edge! If they make money, it´s a bonus!
However, I sympathise with a particaular view of criticising business like investing.
Many clients of private banks have generated wealth from developing a business. There interest in an investment portfolio with a bank may be to take advantage of the properties of listed securities of companies that non listed companies/businesses do not have.
If they wanted to make more money by making business like decisions, they could work on their business, where they have a track record of doing it.
However, this can be counter acted by suggesting that by buying the securities of listed companies they are diversifying their wealth in different businesses and different geographies in a more rapid way than if they did it directly with their own business. Also, they would be dealing with companies that in general would have more experience of working in a particular country or product, so there should be less risk involved.
A particular client made me feel that perhaps I am being too short sighted thinking too much on the potential of the permenant loss of capital and long term business investing decisions, and that a branch of short term strategies need to be included in the portfolio. Value investors usually appriach this by focusing on corporate actions - perhaps it was about time I did the same.
Yours sincerly,
Alessandro Sajwani
Subscribe to:
Post Comments (Atom)
Hi Alessandro, what you say is interesting. But its hard not to fall under that trap of guessing newhat you think will happen. i guess in the end i invest on insstinct, but i understand your pokint, what is that instinct about! in the end it is an educated guess with little education. I play with a little money on the stock market but if i wanted to do it seriously I would want to use someone that has an approach that you are applying, it makes sense. Keep up the good work nI look forward to hear what I should be doing, any further ideas on individual stocks?
ReplyDelete