03-28-2022, 01:57 AM
Why invest in the S&P instead of buying real bussinesses?
<!-- SC_OFF --><div class="md"><p>So obviously with the S&P you should expect a 6-8% annual return. With investing in real estate something similar, probably even less. However, when you look online at businesses for sale, they are typically valued at 1x revenues and sometimes even cash flows.</p> <p>Obviously, they are more riskier and timelier. They require paying employees and maintaining operations. In general, private businesses for sale seem to produce way better returns than investing in a public company. I presume this is what Buffett meant when he said that if he was investing small sums of money that he would produce way higher returns.</p> <p>Why aren't more people doing this? Are these businesses too good to be true?</p> <p>edit: i misspelled title... rip</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/actmathsucksballs"> /u/actmathsucksballs </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/tpbwf1/why_invest_in_the_sp_instead_of_buying_real/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/tpbwf1/why_invest_in_the_sp_instead_of_buying_real/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><p>So obviously with the S&P you should expect a 6-8% annual return. With investing in real estate something similar, probably even less. However, when you look online at businesses for sale, they are typically valued at 1x revenues and sometimes even cash flows.</p> <p>Obviously, they are more riskier and timelier. They require paying employees and maintaining operations. In general, private businesses for sale seem to produce way better returns than investing in a public company. I presume this is what Buffett meant when he said that if he was investing small sums of money that he would produce way higher returns.</p> <p>Why aren't more people doing this? Are these businesses too good to be true?</p> <p>edit: i misspelled title... rip</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/actmathsucksballs"> /u/actmathsucksballs </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/tpbwf1/why_invest_in_the_sp_instead_of_buying_real/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/tpbwf1/why_invest_in_the_sp_instead_of_buying_real/">[comments]</a></span>Kind Regards R