— Bill Bonner Diary April 22, 2016
Buffett gives an analogy:
If you (a) forego 10 hamburgers to purchase an investment; (b) receive dividends which, after tax, buy two hamburgers; and (c) receive, upon sale of your holdings, after-tax proceeds that will buy eight hamburgers, then (d) you have had no real income from your investment, no matter how much it appreciated in dollars. You may feel richer, but you won’t eat richer.
“As we began to explain earlier this week, we’ve been in this business for over three decades. During that time, our investment profits have been meager, but our skepticism has greatly increased!
The truth is, few people make much money from public market investing. You’re much more likely to make real money by buying a parking lot… investing in your brother’s new venture… or starting your own business.
Buying a stock on Wall Street… or worse, investing “in the stock market”… seems to us like a reckless gamble.
If there were real money to be made, why would the Wall Street sharpies let you make it?
The only possible answer: They make more money selling you shares than they would by buying them.”