If you have worked with private investors for long enough, you will inevitably come across a person who wants to invest in the stocks of a specific company with a well-known brand.
By way of a thought experiment, let‘s assume that you suspect that company A is underpaying its employees, squeezing its suppliers and overcharging its customers. Worse, you happen to be one of those customers and you have nowhere else to go. Would it not make sense to buy stock in company A, on the assumption that most of the gross margin will eventually end up in shareholders‘ pockets? Or am I, in thinking like this, in danger of becoming the drunkard who buys the pub?
Customers that have nowhere else to go means that the company has a regional monopoly. And these monopolies tend to be great investments. In essence if you are the only pub in town, it doesn’t matter if you are a drunk and buy it.
This is in fact the only way that retail banking customers in Canada have any hope of beating the Big Five (https://en.wikipedia.org/wiki/Big_Five_(banks)). Arguing with management over extortionate fees is a waste of time. The only thing you can do is buy the stock, then at least some of the proceeds of extortion end up in your pocket.
By way of a thought experiment, let‘s assume that you suspect that company A is underpaying its employees, squeezing its suppliers and overcharging its customers. Worse, you happen to be one of those customers and you have nowhere else to go. Would it not make sense to buy stock in company A, on the assumption that most of the gross margin will eventually end up in shareholders‘ pockets? Or am I, in thinking like this, in danger of becoming the drunkard who buys the pub?
Customers that have nowhere else to go means that the company has a regional monopoly. And these monopolies tend to be great investments. In essence if you are the only pub in town, it doesn’t matter if you are a drunk and buy it.
This is in fact the only way that retail banking customers in Canada have any hope of beating the Big Five (https://en.wikipedia.org/wiki/Big_Five_(banks)). Arguing with management over extortionate fees is a waste of time. The only thing you can do is buy the stock, then at least some of the proceeds of extortion end up in your pocket.
I will give the child shares in a private university.
They might not become wealthy, but at least it might encourage them to finish their geography homework.