Be An Active Owner-Investor

If you own a business, you must be actively involved. The same goes for stocks.

- Simon Brown

I have written before on the topic of an investor acting like an owner. I want to revisit it because it’s important, especially as many of South Africa’s listed stocks remain under pandemic pressure and because the lockdown has in some ways made it easier.

Think for a moment if you owned a couple of pizza restaurants. You own them but don’t manage them – management is left to a team of pizza experts. This is pretty much how it works when we buy listed stocks on the stock exchange. As the owner of these pizza restaurants, you wouldn’t just sit back and wait for the annual results and dividend payments, surely? At a minimum, you’d be an active investor occasionally visiting one of the restaurants and maybe even doing some mystery shopping and getting a friend to order and report back on the experience?

As a shareholder in a listed business, we can, and must, do the same.