Hi fellow Hivers,
I hope you are all well. Right now I am enjoying Friday evening and trying to pretend that Monday will never come. It's not good to feel that I am becoming like a robot these days. On the one hand, with the master's projects, the time I have for myself has decreased a lot.
Let me start today's post with the hope that things will get a little better after the summer.
There was a subject that caught my attention. The number of people who equate the stock market with gambling is quite high. I have recently started to see a lot of people who think like this around friends and in some environments. Some people may even call you a gambler for this. Maybe they are right :)
When we look at the profit and loss ratios of commodities with a simple search, we see that both are around 50%. So what percentage of those in profit can make a profit above inflation? Actually, there are more metrics in this calculation than we think. And to be honest, the percentage of the investors who are making real returns is actually much lower than 50%. When I say investors, I'm not sure if we should say lucky gamblers :) But there is one thing I am sure about. The majority of loss-making investors are not financially literate. I am talking about people who cannot make their own analysis and continue their financial movements with what they hear from around. However, isn't what we call the stock market actually like being a partner of a company? In other words, perhaps we can say that we can discover reliable and good companies in the early stages. This is my personal point of view. Imagine that you owned TSLA, APPL, AMZN, META shares years ago. Under what scenarios would you be likely to make a loss in the long run? I think very little.
So how can we identify reliable companies in advance?
Looking at the Fortune Global 500 that is annual ranking of the largest 500 corporations worldwide as measured by total revenue would be a good place to start. The data is available from 2009 to the present. Simply observe that you bought some of the biggest stocks 10 or even 5 years ago and see where they would be today. It is almost impossible to make a loss in the long run. If we think long-term, it is actually very difficult to lose money in the stock market, not to make money. I think the key rule is to be a long-term investor in companies.
In addition, doing fundamental analysis at least once a month, following the company's news and media, following its investments, making comparisons with previous years will be important supporting factors for someone who wants to gain one hundred percent financial independence in the future. The bad scenario usually happens to those who sell their commodities in a panic during sudden declines or downtrends. The important point here is to remember that a company whose shares fall by 25%, for example, is not completely bankrupt. A stock that falls in price for various reasons will, of course, rise again.
I would also like to point out that there are many other factors to consider when choosing a company. Those who care about their future have already started to educate themselves. Going back to the gambler at the beginning :) stop seeing the stock market as a slot machine in a casino.
Wish you conscious investments,
Yaser