Thursday, May 24, 2007 9:57:13 PM
mimurray... I understand what you are saying here, and certainly your point about not receiving/expecting any special benefit or implicit authority out of being a shareholder is important.
But, for clarification because some don't even realize this, in reality we are here betting on the outcome of the value of the shares. Those shares are largely a separate matter from the organization, its mission and its operations. Only By-Laws and voting bring the two together and those are only ways of giving direction to the BOD, who in turn then gives direction and supervision to the Officers who run the company.
Ideally, the company is interested in making their money from their products or services, while we are interested in making our money from buying right and selling right. Pinksheet companies sometimes stray because the BOD and Officers are not always distinctly separated from abusing those shares, even other public companies can at times, but that is unfortunate when it happens in an adverse fashion.
Most importantly, seldom does any of our investment actually go to the company... it goes to pay the person who sold the shares to us and commissions (not usually involving the company at all except in record keeping matters, and not usually even indirectly flowing to the company. Seldom does the company benefit from us buying their shares, except indirectly by having a higher equity value for borrowing, credibility, etc.; or as "price support" during those rare times when shares are being issued by the company.
Too many people believe that their investment goes into the company's pockets. That is really only true during certain infrequent events when the company is selling shares, and then only in an indirect fashion (unless you are participating in an IPO).
So, "we support the company" is almost always really only an indirect form of support.
Don't marry your investments. Remain analytical and not emotionally involved. That's my advice anyhow.
But, for clarification because some don't even realize this, in reality we are here betting on the outcome of the value of the shares. Those shares are largely a separate matter from the organization, its mission and its operations. Only By-Laws and voting bring the two together and those are only ways of giving direction to the BOD, who in turn then gives direction and supervision to the Officers who run the company.
Ideally, the company is interested in making their money from their products or services, while we are interested in making our money from buying right and selling right. Pinksheet companies sometimes stray because the BOD and Officers are not always distinctly separated from abusing those shares, even other public companies can at times, but that is unfortunate when it happens in an adverse fashion.
Most importantly, seldom does any of our investment actually go to the company... it goes to pay the person who sold the shares to us and commissions (not usually involving the company at all except in record keeping matters, and not usually even indirectly flowing to the company. Seldom does the company benefit from us buying their shares, except indirectly by having a higher equity value for borrowing, credibility, etc.; or as "price support" during those rare times when shares are being issued by the company.
Too many people believe that their investment goes into the company's pockets. That is really only true during certain infrequent events when the company is selling shares, and then only in an indirect fashion (unless you are participating in an IPO).
So, "we support the company" is almost always really only an indirect form of support.
Don't marry your investments. Remain analytical and not emotionally involved. That's my advice anyhow.
