How to Profit from the Stock Market While Relaxing Like it’s the Weekends

I like studying stocks during the weekend. It’s my favorite routine. The share market is closed during the weekends, and share prices stop moving about.

We may also get more done in a quiet environment.

In any case, looking at share price movements every 10 minutes or so while the market is open hardly informs you anything about the business behind the stock ticker. Perhaps, this is why investing maestro Warren Buffett shared these words before:

The thing is – it’s really up to us to make our weekday investing routine similar to our weekend investing routine.

And how could we do that? By not looking at share prices, of course.

Business first, share price later

If there is one little nuance I could encourage our Foolish readers to practice, it would be this: read up about a company’s business first before you even look at its share price. The sequence here is important: business first, share price later.

When you think about it, there really no reason why Foolish investors should look at the share price before studying a company.

In the past, when the stock market in Singapore had a board lot size of 1,000 shares, it was perhaps fair to say that some consideration had to go into a company’s share price as shares with big price-tags may not be feasible as an investment for investors with smaller portfolios.

But things have changed. With the latest reduction in the board lot size to 100 shares, there are even less reasons now to look at a company’s share price first before studying its business as most shares would likely be within reach of the private investor.

For instance, one lot of the blue chips like stock market operator Singapore Exchange Limited (SGX: S68), or utility and marine giant SembCorp Industries Limited (SGX: U96), would now cost less than $1,000 given their share prices of around $8 and $4 respectively.

As such, its really the time spent on reading about the business behind the ticker which would be more beneficial to the Foolish investor.

Once we have a good handle on a company’s business, we may be in a better position to figure out how much its shares are worth. And, only then does it make sense for us to compare our valuations with where the share price is trading at.

Foolish summary

My US colleague Brian Richards sums up my thoughts well in a recent article of his:

We’re fond of saying “Buy businesses, not tickers.” A ticker moves around a lot between 9:30am and 4:00pm every day. A business does not (or at least, should not). If your time horizon is measured in years or decades, your goal should be to find great businesses and watch them create shareholder value slowly and steadily.

It is in our hands to choose where we spend our time during the weekdays. And it’s in our hands to extend our weekend investing routines into the weekday. I’ve chosen how I would like to spend my time – how about you?

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.