When the stock market rises, all investors will feel richer, but if a shareholder wants to withdraw, a new shareholder must join him to take over. If one investor sells at a high price, another investor must buy at a high price. As a whole, all shareholders of
cannot get more wealth from the company than the company will generate if there is no money rainfall from the sky.
In fact, friction costs exist, which leads to shareholders receiving less profits than the company. If these costs get higher and higher, shareholders will have a much lower future earnings level than their historical earnings before tax.
The sum of wealth that shareholders can obtain can only be the sum of wealth created by listed companies other than transaction fees and taxes. Therefore, a successful investor in has only a good way to make profits: the first is to buy companies that will continue to create wealth, and the second is to take it as its own when other shareholders lose their wealth. To teach the two, the former is better because its transaction fees can be controlled as much as possible, and it is easier to operate than the latter.
Investing is that simple: buy a good company and hold it for a long time. The key is to find good companies that can continue to create wealth.
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