Note: This article is a collaboration between The Good Investors and The Woke Salaryman. It was written by me and edited by He Ruiming. An earlier version of this article was first published in The Woke Salaryman. Investing in stocks is sometimes made unnecessarily complex. But really, if you boil it down, it’s basically making an educated guess on whether you’ll see your money return to your hands (hopefully more than the initial amount). So, we decided to come up with an analogy that you might find all-too-relatable – lending your friend money. Okay, but before the nitpickers start, we have a few caveats to make. There are key differences between investing in companies and lending money that we will disclaim upfront. Namely: Lending and getting your money back (hopefully) involves a short time frame, but investments are often for the long term
Lending can be an emotional decision; investing...