The Rich Are Losing Money Investing in Stock But the Poor Have Advantages
Even rich people are losing money at this point with our current market crisis. Some rich people are even losing billions of dollars in their net worth. The greatest investor of all time Warren Buffet has even been losing money. Some of you may be asking, if all these famous and rich people are losing money why should I even think about investing in stocks at this point? The reason is because poor people actually have advantages over rich people when they invest. For one thing Warren Buffet many times has admitted that he would be investing a lot differently if he had less than one million dollars. What he means is that when he was youngger and not nearly as rich as he is now he could buy into SMALLER companies that had a restricted management, and were not so dependent on the general stock market like the bigger companies are.
Now with Billions of dollars investors like Warren Buffet would be wasting their time buying into companies with a small market capital. The other advantage poor people have over the rich is that they can be in and out of a given investment in a very short period of time. This is way different from rich people who have to take weeks sometimes to put a large portion of their capital in a position, or for that matter take it out. Now that we know our advantages we must exercise them to out advantages so we can invest like Warren Buffet did before he made his first ten million. After all if most of us had only a few million we would be living a lot better lives than what we are currently living.
So What makes these little companies tick and go way beyond the general markets like the DOW and NASDAQ? The answer is good products, a dedicated management, and will power to take on new markets all the time for even more money. There are many ways to determine companies like this. Seeing if the company pays a dividend in a general down market, or seeing how much cash or insider ownership the company has are a few of the ways of telling if the business is good or not. The only way to beat a market like we have now is to think about being part owner in good long term businesses, that have a sound and tough business model to compete with. Despite current unemployment rates and the bad economy we can make money in the long run. Using this idea of value stocks we will beat out investing in index funds or trying to make a quick buck with trading.