Mind of Matt Snow

Why Equities and the Stock Market are still powerful drivers in investing

Imagine owning your own company. In this company you provide a good or a service to people. Not just the people in your immediate environment but the people in your entire country, some people in foreign communities. You don’t just run this company by yourself though, Its run by your guidance, the subliminal guidance of your board of directors, The labor who are important for getting your projects done and goods made, and most importantly the people who BUY your good and/or service.

Now doing this alone can be a daunting task. But what if you offered a fraction of your company to its most important driving force, the customer and the layman. Here’s where we enter the Equities market. By offering shares you give people who have an interest in your company a way to support you indirectly through partial ownership. What determines the ultimate value of this partnership? The ideal but simple answer is firm fundamentals.

How far will your company go? It depends on two things your vision as a company and the belief in the people who support you. Both can have infinite consequences.

The power of a smart company leader can reach towards the end of the earth if they are successful but it will not be easy. For one you have fierce competition that will try and beat you in the realm of business in any way that they see fit. Also economic forces can and will sometimes play a damper on how productive you can be and may even run the risk of destroying your business completely. How can you weather this storm? With firm fundamentals.

The difference between an investor and a speculator is that the investor values firm fundamentals even if he may be wrong. The speculators look for technical trends that they feel will give them honest answers, they may be right sometimes but they will never be certain. I personally feel firm fundamentals are the heart and soul of the Stock Market. Every company you involve yourself in whether your an owner, consumer or stockholder should be viewed as a value on your time. That value and belief is the driving force of the stock market which is why to this date Equities have been the strongest investment even though they are thought of as the most risky.

Believe in your firm fundamental value. 

- “The Returns on Stocks are dependent on the quantity and quality of capital, productivity and risk taking.The Ability to create value also springs from skillful management, a stable political system that respects property rights, and the capacity to provide value to consumers in a competitive environment.” -Jeremy Siegel