A shareholder in a private company that’s profitable well isn’t losing money on the investment. A shareholder in a profitable publicly-held company might be losing money depending on when they bought in.
Additionally, the shareholders in the private company have to consider the future because they can’t dump their shares as easily. That promotes sustainable business practices instead of chasing short-term gains at the cost of long-term viability.
The only difference between a public company and a private company (in this sense) is how liquid the asset is, said another way, how easy it is to enter or exit the position, and how regularly the holdings value is recalculated.
I could buy 100k of valve stock of someone tomorrow, and then find myself wishing I’d bought NVIDIA. I could buy NVIDIA tomorrow, and it could crash and I could wish I’d bought in to Valve.
Yes, but they chase it in different ways.
A shareholder in a private company that’s profitable well isn’t losing money on the investment. A shareholder in a profitable publicly-held company might be losing money depending on when they bought in.
Additionally, the shareholders in the private company have to consider the future because they can’t dump their shares as easily. That promotes sustainable business practices instead of chasing short-term gains at the cost of long-term viability.
That makes no sense.
The only difference between a public company and a private company (in this sense) is how liquid the asset is, said another way, how easy it is to enter or exit the position, and how regularly the holdings value is recalculated.
I could buy 100k of valve stock of someone tomorrow, and then find myself wishing I’d bought NVIDIA. I could buy NVIDIA tomorrow, and it could crash and I could wish I’d bought in to Valve.
Exactly. When it’s more difficult to enter and exit a position you need to take a longer-term view.