Why does anyone buy individual shares?

abz88

abz88 wrote: »

. I could spend 2 hours a day, but that would likely only get me as far as reviewing annual/quarterly accounts and reports properly for a single company never mind comparing that to their competitors, industry movings, potential government legislation that could affect future performance etc.

benbay001 wrote: »

Youre buying one new company a day?

No, as I stated, I invest in tracker funds partly because I don't have enough time to properly review individual companies.
The point was that, even if I spent your 2 hours a day (everyday for the less than 12 months you have been investing) this would likely only get me as far as researching a single company properly and reviewing its performance (quarterly accounts/reports, outlooks, market predictions, etc). In my opinion, 2 hours a day is not enough time to learn/research and manage a portfolio of companies. There is a reason its a full time job for fund managers, no one would invest in a fund that is managed for 2 hours a day, so why do you think that's a more than adequate amount of time for an individual investor to be able to beat the market in the long run?

poppy10_2

Alz1986 wrote: »

Firstly, Warren Buffet did not get rich by investing his money into index funds and trackers. And nobody will ever get rich by investing in them either.

Not true at all
Someone who invested 10k in an S&P 500 index tracker in 1989, and did nothing else other than reinvesting the dividends, would have over £1.5million now.

Warren Buffett has given instructions that 90% of his wealth should be invested into index funds when he passes away. He famously had a long running bet with an active manager that an index tracker would outweigh a basket of actively managed funds - he won the bet.
https://www.cnbc.com/2019/02/26/warren-buffett-wants-90-percent-of-his-estate-invested-in-index-funds.html
http://longbets.org/362/

benbay001

abz88 wrote: »

No, as I stated, I invest in tracker funds partly because I don't have enough time to properly review individual companies.
The point was that, even if I spent your 2 hours a day (everyday for the less than 12 months you have been investing) this would likely only get me as far as researching a single company properly and reviewing its performance (quarterly accounts/reports, outlooks, market predictions, etc). In my opinion, 2 hours a day is not enough time to learn/research and manage a portfolio of companies. There is a reason its a full time job for fund managers, no one would invest in a fund that is managed for 2 hours a day, so why do you think that's a more than adequate amount of time for an individual investor to be able to beat the market in the long run?

My point was quite clearly that you are not going to be buying one company per day. Two hours average research per day, is 730 hours per year. So if i have bought 4 companies in that time, thats 182 hours research per stock bought.

Thrugelmir

poppy10 wrote: »

Not true at all
Someone who invested 10k in an S&P 500 index tracker in 1989, and did nothing else other than reinvesting the dividends, would have over £1.5million now.

Hindsight means very little when it comes to investing.

abz88

benbay001 wrote: »

My point was quite clearly that you are not going to be buying one company per day. Two hours average research per day, is 730 hours per year. So if i have bought 4 companies in that time, thats 182 hours research per stock bought.

And my point was quite clearly that 2 hours a day isn't enough to successfully manage a portfolio of individual companies as it isn't enough time to properly research one of your companies, never mind a varied portfolio. 730 hours (assuming you spend time on Saturday and Sunday as well) vs 2,024 hours of a fund manager plus the hours of all their support staff. What makes you think you can get better results with no where near as much work?

iglad

poppy10 wrote: »

Not true at all
Someone who invested 10k in an S&P 500 index tracker in 1989, and did nothing else other than reinvesting the dividends, would have over £1.5million now.

Warren Buffett has given instructions that 90% of his wealth should be invested into index funds when he passes away. He famously had a long running bet with an active manager that an index tracker would outweigh a basket of actively managed funds - he won the bet.
https://www.cnbc.com/2019/02/26/warren-buffett-wants-90-percent-of-his-estate-invested-in-index-funds.html
http://longbets.org/362/

All very well saying that but I've not read of anyone who's actually made a million investing in tracker funds with a small investment.

iglad

Individual shares are not really a suitable investment vehicle for the small investor as I held a small number of shares for over 20 years. I sold them and it was the best thing I ever did as it was one less thing to check and be disappointed at the low share price and pitiful dividend.

Thrugelmir

iglad wrote: »

All very well saying that but I've not read of anyone who's actually made a million investing in tracker funds with a small investment.

Easy to pick a timeframe in which one should have invested. Miss the relatively few best trading days of any period of time and returns statistically more or less halve.

Eco_Miser

abz88 wrote: »

The average individual investor that buys individual shares will have not control over a company. Investors with enough voting clout to actual influence/control a company are institutional investors and the odd billionaire.

I know.

abz88 wrote: »

If you think owning a few thousand pounds worth of shares in a company mitigates your risk through control, then you are sadly mistaken.

I don't. I don't see anything in my post that suggests that I do.

I was answering the original question "Why does anyone buy individual shares?" That anyone does include the occasional billionaire.

It might also include the various letters in castle96's thread.

bd10

I often buy shares if that company in question is not already held by the funds I have. It's a bit more expensive given the dealing charges vis-a-vis none for funds from supermarkets, but if held longer term, that's not material. Research into the candidates to buy precedes that, but that's the fun part (I wouldn't buy a title willy nilly without having done some homework, that'd be pure punting).