When buying shares, ask yourself, would you buy the whole company?

When buying shares, ask yourself, would you buy the whole company?

Rene Rivkin was a prominent Australian stockbroker and entrepreneur who was known for his success in the stock market. He was a controversial figure, with a reputation for taking risks and making bold investment decisions. One of the key principles that Rivkin often emphasized was the importance of thinking like a business owner when buying shares.

Rivkin believed that when buying shares in a company, investors should ask themselves whether they would be willing to buy the entire company if given the opportunity. This approach forces investors to think more critically about the long-term prospects of the company and whether it aligns with their investment goals and values.

By asking this question, investors can gain a deeper understanding of the company's business model, competitive advantages, and growth potential. It also encourages investors to consider factors such as management quality, financial health, and industry trends that could impact the company's future performance.

Rivkin's philosophy of thinking like a business owner when buying shares is particularly relevant in today's fast-paced and volatile market environment. With the rise of online trading platforms and the proliferation of new investment opportunities, it can be easy for investors to get caught up in short-term market trends and lose sight of the fundamentals of investing.

By adopting Rivkin's approach, investors can make more informed and strategic investment decisions that are based on a thorough analysis of the underlying business fundamentals. This can help investors avoid making impulsive decisions based on market hype or speculation and instead focus on building a diversified portfolio of high-quality companies with strong growth potential.