Kamis, 06 Oktober 2011

What help you give when you buy shares v.09

Some people they came to the stock market to learn, to do, but what is it that we actually do in the stock market? How do we contribute to the level of availability of mutual solutions in the reality?

The stock market helps the management to have less demands to pay dividends. Shareholders wouldn't scream for dividends if they could have their stocks bought at higher price. When you bought stocks you'd improve a company's ability to reinvest in growth. If the company's products were very helpful, like quality cements or food, or medicines, you'd potentially contribute to the future quality and quantities and prices improvements. But if the management didn't know how to grow properly, ofcourse its better that they just pay the dividends.

So the objective increase in prices should only be based on the net profit, beyond that is too much. This is secondary market, the extra money people pay, extra as in more than the amounts of dividends supposed to be paid by the company + the appropriate price of ownership, won't surely benefit the company, but more to the previous investors. Before paying the extra price, ask the question "How much do I want to profit the previous investors?"

If you could understand Bahasa Indonesia, please see my other posts related to this:
Reputable market in Indonesia, Reputable market in Indonesia continued.

(I think its dangerous to give money beyond the purpose of helping as the purpose of money is to say that the holder has performed help and hasn't been helped back. So if you give money to somebody, should only be in cases where the person has helped you... or where the person is important to you if other people helped the person that would meant helping you. Otherwise you'd send a message to the world that its ok to access help without helping back... and this is evil, dangerous, and should be isolated.

But in case of charity, by helping poor people you're sending a message to reality that those who are in distress have more to hope... we are all humans and we are all liable to have poor moments, helping poor people is in itself automatically maintaining accesses to solutions.)

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