Posted by: The Soaring Eagle | May 2, 2011

Why Do You Invest?


Have you ever asked yourself this question?

Some people invest because they don’t know what to do with their money! Some to imitate their friends or family.

The reason we invest is two-fold: One is to grow our savings, and the other is to contribute to our society by supporting wonderful businesses.

As a value investor, you should not invest in businesses that harm the society, even if they pass the criteria for a wonderful business at an attractive price. There are hundreds, if not thousands of businesses that qualify without imposing any harm to the society.

Are there other reasons to invest? To put your money on the line? To allow others to make decisions, concerning your money, on your behalf, without consulting with you, most of the time?

Investment, when practised mindfully and full heartedly, gives you the opportunity to sharpen your intellectual faculties: You study, analyze, compare, make decisions, and so on.

You also get to have a broader view of the market and the forces that influence it, regardless of its moodiness!

You realize after a while, that there are businesses out there, you haven’t heard of before, especially if you had been a professional in a specific industry. Here, you almost know them all, but you don’t have to be an expert in any one of them. As a matter of fact, you shouldn’t, to avoid any potential bias.

In my opinion, if you reach that level of neutrality, you can call yourself: a businessman.

You no longer fall in love with technology, retail, energy, manufacturing, or whatever. Your main focus is on the business as a business: A vehicle to produce value to the society, the employees, the shareholders, and of course, to you!

And that value is not only money. It is also a contribution to productivity, to a stronger economy, and to the well-being of all involved.

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