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Stock Markets And You

Author : Pankaj Modi


If you have the resources, would you rather be the total owner of your own business, or have just a part of some one Else's business? Well, ask a silly question . . . your answer would be OBVIOUSLY total ownership! What is the point of owning a minuscule part of a business, when it is possible to buy the whole business? Any one would love being total owner. Indeed, this is quite the answer expected, and it seems pointless to start a blog. Asking such a question when it could begin dispensing information on myriad specific topics like credit card consolidation and mortgage loans or diversifying portfolios. These are among the many vital topics people are in doubt all the time. The answer is simple, and it is that the answer to the question that was asked is not that simple nor as obvious. A convoluted statement may be, but some explanation is in order. While it may seem plain and logically clear that if the resources were present, it would be smart to buy the entire business than a share of it; this is not really the case.

The logic gets disproved when looked at in terms of greater value for money, in fact, better utilization of the resources. Unlimited though they may, the best use of the money you may spend on buying up an entire business would be by buying fractions of several companies. Now you get it. The world of stocks is exactly what is being talked about. Here, you get the better deal if you buy the fraction or the stocks rather than if you buy up whole companies. In any case, this is always the better position to be in, if you are on the look out for the optimal use of your money. Of course, if you are an entrepreneur rather than an investor, who is interested in running the business, which is a different story as it involves. Purchasing an entire company is fiddly in the extreme. The deal is often among sellers and buyers who are extremely knowledgeable as well as resourceful. The deal may not always work out in the buyers benefit.

If the company is worth buying, it is absolutely certain that you will have competition. Numerous players will come in and some will operate clandestinely. It is a given that it will not be a one horse race, and you will have to name the best price. As interest evinced increases, your hold over the price will relax. Hardly a happy scenario when looked at from a buyer's viewpoint. Purchase prices will hardly remain at the low. The probability that the entity that ends up with the company has paid quite a steep price for it is pretty strong. This may lead to chances of creating long term value being diluted. Part owner ship or buying stock is a whole different ball game. Cheaper and more value for money in many ways less cumbersome than owning a whole company. Getting richer through stocks is a whole lot easier than buying up an entire company. A negotiated price of the company will come out entirely different when compared with prices stocks.


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Financegenie.net offers information on all things financial including tips on how to avoid personal bankruptcy, mortgage loans, saving tips and credit card consolidation.

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Tags:   personal bankruptcy, credit card consolidation, mortgage loans

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Submitted : 2010-12-08    Word Count : 533    Times Viewed: 192