“Now you see my point when buying stocks. We can’t predict when the markets will price our $65 billion companies at just $50 billion. When they do, we’ll jump on them. Will we buy at the absolute bottom? Probably not. Still, if McDonald’s — the $65 billion company — is a good buy for $50 billion, wouldn’t it be an even better buy at, say, $45 billion?”
I was recently reading an excellent post titled Make Your Loved Ones Get it on Fwallstreet. Joe Ponzio’s blog is based on Warren Buffett’s ideology, how the value of the company is more important then the price of the stock. In his post it goes through a conversation anyone can give to a family member or friend about how to understand basic principles of the market in relevant terms. Hammering home that purchasing a stock isn’t merely borrowing/renting a company, but rather owning the business. With the intention in which to hold on to it for the long term.
In his post, he used McDonald’s as the company of choice and also suggested it as the meeting place for conversation. Even though McDonald’s has had some financial gains in the past year, I wouldn’t use the company solely to base the entire stock market on. It deficiently is one of many great examples, and is easy to relate to for others. The way they make money is easy to see, and some would even argue McDonald’s is recession proof.
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