Should I buy a house or invest in stocks?

Should I buy a house or invest in stocks?



I feel I owe it to my readers to answer the question of whether I’d better pay off a mortgage or invest in stocks by asking myself a couple of practical questions. So in any event, this is a critical question I’ve needed to ask myself for a while now, and I’ve finally come up with a relatively honest answer.

I’ve loved real estate since I’ve been able to understand it.

I was a property owner and business investor during the collapse of Lehman Brothers in 2008, and I’ve been holding onto that property for at least the past decade since I sold it to an international investor who wanted to make money quickly.

I’ve never traded in the stock market (that’s probably a good thing) and I’ve never lived in a house that’s been my main business. I’ve only ever eaten a meal in a house that’s been my home of 14+ years. So I really don’t know much about the economics of people keeping their house for rent.

If I were to buy a house to invest in, it would need to be sold in the near future. So making money quickly wouldn’t be possible.

I’m still not convinced the only way to make money fast, as an investor, is to buy and sell things.

I’ve just looked at Amazon.com, one of the best businesses in the world, and I think it’s worth having a look at what they’re doing with the extraordinary company’s cash.

This year, Amazon’s bought back about a billion dollars worth of shares to keep them from falling precipitously.

Since 2016, their net share repurchase has been a consistently positive sign, that’s been an incredible signal to an investment that shows that they are a much more serious company.

Why wouldn’t you do the same thing?

In August, Chief Executive Officer Jeff Bezos said, “This year we’re increasing investment into our future technologies, consumer and business offerings, and research and development.”

Net sales soared 25% year-over-year to $17.1 billion, the fourth straight quarter of accelerating sales.

These are the kinds of results that other CEOs are attracted to when they follow this pattern.

I’m not saying this means Amazon’s going to do all of these things, or that it makes great investments, but if Amazon’s doing it, then there is no reason to think that other businesses don’t have the same path and are willing to invest a lot of money in what they need to become more competitive than them.

Looking at Amazon’s results, I think I’m right about the next step of the picture.

If Amazon’s not investing in growth, then other businesses aren’t either.

That’s why I think Amazon’s the optimal example for investment in stocks.

So when Amazon stocks dropped to $2,000, I ended up buying a handful of shares for my first-ever off-the-lot purchase. If I’d invested in bonds, I would have lost so much money, it would’ve been tough to put anything into stocks.

Sure, its IPO came as a surprise, and the money was easy to make at all, but if you look at it rationally, it means I’m making a bet on one of the businesses/investments that will have the best chance of becoming dominant in the foreseeable future.

I have a lot of love for businesses who keep their stocks in the money, like Facebook and Google, and despite not being heavily invested in stocks, they’re doing a whole lot of the right things, and if I try to invest in them, it would certainly do something to at least offset the money they took away from me, which is a good thing.

That said, they will be fascinating businesses to watch because they’re doing the basic things that investors want to see: growing sales, an incredible user base, and a trustworthy leadership team.

But who’s next?

It depends on who you’re analyzing. If you’re focused on cash for investment, then Wal-Mart looks really good. But other businesses who are more about growth need to know about the platforms they’re building.

If I were looking for industries or geographies, something like China’s market may be a great way to invest. This is a double-edged sword.

To me, a better way to invest in stocks is to do it yourself, so whether you follow Bezos’ lead, or

Post a Comment

0 Comments