Stocks represent trades that signify the future value of the present. The current price of a stock conveys insights about the company’s future. In essence, it involves the buying and selling of future potential. However, stock prices also reflect past performance. When a company announces its performance, it often includes disclosures about stock purchases and sales by major shareholders or executives. This practice has historical roots, but the public disclosure of such information now affects the stock’s current price. Time influences present value, whether it pertains to the past or the future. Ultimately, time is the most critical variable in asset valuation. - Joseph’s “just my thoughts”
Warren Buffett, who has amassed 99% of his wealth since the age of 50, revealed that the secret lies in “compound.” When you lend money, interest is added to the principal as income. Initially, interest is applied only to the principal, but compound interest is applied to both the principal and the accumulated interest. Therefore, at first, it seems negligible, but over time, significant wealth growth takes place. The same principle applies to reading: even if your reading speed is slow, consistently reading just a few books each day can lead to a wealth of knowledge. After a year, this accumulated knowledge creates a network effect, allowing you to quickly absorb new information. Consequently, your reading speed increases dramatically, leading to an exponential growth in the volume of material you can handle. This exemplifies the compound interest effect. Even small, consistent actions taken daily can build up and create a compound interest effect over time. Cartoonist Lee Hyun-se sta...