Forum Archive Index - October 2001

["nick" <helmett@xtra.co.nz>]

         There is a fundamental difference between betting on a horse
and buying shares in a company.  In a horserace only one horse
can win , however if shareholders invest in a good company, they can
all win. The main reason is dividends.
       When investing in stocks you actually are buying a stake in the
company
however small that stake maybe. If you bought enough shares ie 51%
then effectively you would control that company.
   It is true there are many who treat the sharemarket as if it was
a horserace, the only difference between them and the horserace
bettor is that if the speculator does his homework he can expect
superior returns.
        Nick


>
> > An investment in a company by way of share ownership is no more than
> > speculation on the future performance of that company, in a game played
> > against other speculators.
> >
> > Because very little, if any, of this invested cash goes directly to the
> > company any investment in the share market is essentially no different
> from
> > picking horse 3 to win race 4 (or whatever form of gambling tickles your
> > fancy)
> >
> > The difference being you read share market form with P/E ratios, yields,
> > growth rates and all those sort of things and your sharebroker is no
> > different from your local bookie or the TAB.
> >




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