Broker Check

 

Is Investing the Same Thing as Gambling?

| September 23, 2019
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She wakes up at 5:30 to her Sony alarm clock and goes to pour herself a bowl of Kellogg’s cereal and start a pot of Folgers coffee in her Bunn coffee maker. After eating breakfast, she begins getting dressed for work. She clips off the price tags from the great deal items she bought over the weekend at TJ Max and irons her new clothes with a Black and Decker iron.

She heads off to work in her Ford explorer and stops to fuel up at the local Chevron. She buys an Ozarka water and a pack of Wrigley’s gum and pays for it with her Citi credit card. When she finally arrives at work, she starts her Dell computer and grabs her Quill yellow note pad and Bic ink pen before heading to her morning meeting.

After work she heads to the gym to meet a couple of friends and jump on a Star Trek treadmill before heading back home. On the way home she calls her sister on her Apple iPhone with AT&T service. At home she feeds her dog Purina dog food and her cat Iams cat food. She grabs a Stouffer’s frozen lasagna from her Maytag deep freezer and heads inside. She begins cooking her dinner in her Panasonic microwave while turning on her Samsung TV to help her begin to wind down for the night.

Later that evening, just before crawling into her Sealy bed, she brushes her teeth with her Colgate toothbrush and Crest toothpaste. She pulls out her Revue reading glasses and turns on the bedside lamp she recently bought at Home Depot to read until she eventually falls asleep.

Investing, as we always say, is either ownership or loanership. The things we use everyday in our lives come from somewhere. These companies - whether they are traded on the stock exchange or not, or whether they are part of a parent company or not - at times have to raise capital to grow. How do they do that? They either allow investors to own a part of their company or they take a loan from someone. Either way, as investors we have an opportunity to participate in their expansion.

I always ask people, “Do you believe you will be brushing your teeth 20 years from now?” It might sound like a silly question and it is. Many people get caught up in the current news, the current economic conditions or watching the volatility in the markets caused primarily by our own human emotion and confuse that with the true basis of investing. The reality is that investing is based on the financial stability of the companies we are investing in also known as the brands we use every day.

So, let me ask you, Is investing really the same thing as gambling?

 

*None of the companies listed represent a recommendation from KFS to invest. Past performance of any of these companies is not indicative of future results.

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