Do you support the companies in your portfolio by buying their products or services?
Last week, I was looking for a first aid kit in CVS, and they have different brands. But when I saw the brand, Johnson and Johnson (JNJ), I thought to myself that JNJ is part of my portfolio, so I should show support to my holdings. After all, we should buy companies with products or services that we believe in.
I ended up buying the JNJ first kit despite that the price was more expensive than the CVS store brand but I believe that the brand name also justifies the premium.
This purchase just spark my thinking about the companies that I invest in and now the products or services that buy. Warren Buffet always say to only invest in companies that you understand.
I have not always applied this thinking about stocks but I should now. I think it works both ways. You would want to invest in companies with great products or services, and you want to support those companies you invest in by buying those great products and services provided by your portfolio companies. See it’s a great virtuous cycle that benefits the business and your investment returns.
This also makes me realized that the mindset to investing is very important. It’s not about making a quick buck. Great investors need a long term vision and a strong belief in something. In this case, the belief is the companies. This is, no wonder, why Warren Buffet is so successful. He has right mindset for long term investing.
This also reminds me of the book I have read a while ago, Think And Grow Rich by Napoleon Hill. The book emphasizes the importance of your thinking first. Before you become successful you first have to see and believe it in yourself. Once you have a clear idea and vision, everything else is getting it down to a plan and execution. It sounds simple but many people act before they think.
So tell me. Do you buy products or services from companies that you own in your portfolio?