Motivation behind creating the Real Stock Value
The reason I created this tool, is to help retail investors, to make more informed investment decisions.
But why to invest in the first place?
Most people are investing, and not even knowing it. If you hold you saved money under the mattress, even then you are investing. You invested in the given currency that you are holding. If you deposit that money in a Bank, then you invested in the currency and in a minor way in the bank, and even in the country where that bank is located. Cyprus and now Greece are perfect examples for this. If the bank goes bankrupt you may lose some of your money, or get access to it with delays.
Currently if you deposit your money in a bank in the developed world you do not get any interest and bank fees and inflation are eating up your savings, so you need to find a better place for your money.
Other investments that are considered safe, like government bonds in stable countries have no yield or even negative yield, add inflation to that and it is guaranteed that you will lose purchasing power.
So you need to find something with a positive return. The stock market is one of the possible options.
The next logical question is, ok invest in the stock market but how, if I don’t have enough knowledge.
If you give your money to a hedge fund, the fees will eat up the little returns that you get. You take all the risk, if they make a bad investment you lose money, and if they make a good investment they take most of the profits. Besides that they make some money anyway on fees. To make things worse, index investing for example the S&P500 index outperforms 95% of hedge fund in the long run. So you need to be lucky to find that remaining 5% of the successful hedge funds.
If you give your money to a local stock broker, he cannot beat the market either, if he could he would not be a local stock broker, and he is interested to make as many transactions as possible, to make money on transaction fees.
Warren Buffett once observed, "Wall Street is the place people drive to in their Rolls Royce to take advice from people who ride the subway.".
I like Robert Kiyosaki words even more: "The reason they are called brokers is because they are broker than you."
But then what other options do I have?
First of all educate yourself! If you are not interested in investing, just learn the basics, and start investing in an index fund at the right moment. If you are interested in investing, find an area where you have deeper insight and start investing there.
Ok I want to invest only on an index, or some big stable companies, but how do I know when to buy and when to sell.
There are a lot of people out there with hot tips, and a lot of tools to analyze the market, but almost all of them are focused on technical analysis. So they promise, that based on graphics they can predict the future. If you look closer even they, claim that these predictions come true 50 to 60% of the time. This is not much better than guessing, and even if you are right 60% of the time you may lose more on the remaining 40% then you made on the 60% that where winning bets. Add to that all the transaction fees, and it is almost sure that you will lose. If you use some simple trading technique based on technical analysis, a computer can be programed to do the same thing much cheaper and much more efficient. If trading robots can’t make money with these methods, you can’t either.
The reality is that only long term value based investors are making money constantly in the market. Investors like Warren Buffett, Jim Rogers, Mark Faber, Benjamin Graham, Robert J. Shiller, and Philip A. Fisher.
The goal of the Real Stock Value, is to gather the insight of these great investors, in an easy to use tool. Analyze how these investors evaluate companies, and how they decide to buy or sell a company.