Buy low, sell high is not only how you make money in the stock market, it’s how you make money period.
A high school grad spends $100,000 on six years of higher education so she can earn $100,000+ a year for 30 years. Her employer pays her $100,000 a year to work on widgets that the company will then sell monthly for $100,000 apiece. The owner of that company takes a portion of the profits and invests $1,000,000 (think Shark Tank) to own 10% of a little-known tech company started in a garage. That company will then be sold to the public (IPO) for $100,000,000 increasing the owner’s value from $1,000,000 to $10,000,000.
Buy low, sell high. Produce a good or service at a lower price than you sell that good or service. In the stock market you want to buy a company at a lower price than you sell it. Airline stocks are lower because people aren’t flying. People aren’t flying because they don’t want to get sick from COVID-19.
What happens when we have a vaccine? What happens when we have more effective treatment? Will people still not fly? Is it possible that they will fly more knowing that they had their freedoms restricted? Could airline service actually improve as a result of the pandemic? Will airlines make seats more comfortable so that they can win customers back?
These questions will be answered in the future, but if an investor wishes to benefit, they’ll need to buy low.
For help buying low during these turbulent times, contact us a www.wilsonwealth.com.
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