{"id":5722,"date":"2022-09-01T23:56:00","date_gmt":"2022-09-01T15:56:00","guid":{"rendered":"https:\/\/www.granitefirm.com\/blog\/us\/?p=5722"},"modified":"2025-12-05T10:55:58","modified_gmt":"2025-12-05T02:55:58","slug":"investment-is-not-voting","status":"publish","type":"post","link":"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/01\/investment-is-not-voting\/","title":{"rendered":"Investing is not voting"},"content":{"rendered":"\n<p>I mentioned the phrase &#8220;investing is not voting&#8221; in three places in my book &#8220;The Rules of Super Growth Stocks Investing&#8221;: 1-5, 5-4, and postscript.<\/p>\n\n\n\n<p>Because this sentence is so important! I have recently studied several listed companies in the US stock market, and I have a deep understanding of this sentence.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/01\/investment-is-not-voting\/#What_is_a_good_stock\" >What is a good stock?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/01\/investment-is-not-voting\/#What_kind_of_compensation_do_investors_want\" >What kind of compensation do investors want?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/01\/investment-is-not-voting\/#Retailers_can_never_beat_the_market\" >Retailers can never beat the market<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/01\/investment-is-not-voting\/#A_typical_example\" >A typical example<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/01\/investment-is-not-voting\/#Voting_behavior_in_the_stock_market\" >Voting behavior in the stock market<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/01\/investment-is-not-voting\/#Most_well-known_companies_have_poor_investment_returns\" >Most well-known companies have poor investment returns<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/01\/investment-is-not-voting\/#Half_of_Fortune_500_companies_lose_money\" >Half of Fortune 500 companies lose money<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/01\/investment-is-not-voting\/#Closing_words\" >Closing words<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/01\/investment-is-not-voting\/#Related_article\" >Related article<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"What_is_a_good_stock\"><\/span><strong>What is a good stock?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Regarding the definitions of &#8220;what is a good stock?&#8221; and &#8220;what is a good company?&#8221;, most investors will subconsciously respond &#8220;a company that can make me make money is a good stock.&#8221; But the question is what is the definition of a &#8220;profitable business&#8221;?<\/p>\n\n\n\n<p>Investors themselves often do not know, and when they answer the question &#8220;What is a good company?&#8221;, they are mixed with emotions and preconceived elements. Then, answer to &#8220;What is a good company?&#8221; directly affects the answer to the question &#8220;What is a good stock?&#8221;, and of course, it will ultimately affect stock selection, investment judgment, and reward.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"What_kind_of_compensation_do_investors_want\"><\/span><strong>What kind of compensation do investors want?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>I believe that most investors can&#8217;t answer this question, and almost everyone will answer &#8220;of course the higher the better.&#8221; This answer is the same as all financial advisors complain: 99% of investors want &#8220;high-reward, low-risk investment targets.&#8221; The problem is that there is no such thing in this world.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Retailers_can_never_beat_the_market\"><\/span><strong>Retailers can never beat the market<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The author of &#8220;<a href=\"https:\/\/www.amazon.com\/Winning-Losers-Game-Seventh-Strategies\/dp\/1259838048\" target=\"_blank\" rel=\"noreferrer noopener\">Winning the loser&#8217;s game<\/a>&#8221; Charles Ellis, \u201cWhile most investors are doomed to lose if they play the conventional loser\u2019s game of trying to beat the market through active investing, every investor can be a long-term winner,\u201d he concludes. The problem is that most investors don&#8217;t believe this sentence. I think he pierced the new clothes of the lord of wealth management industry.<\/p>\n\n\n\n<p>Because most people think that looking for an expert, looking for an MBA, looking for a financial expert, looking for a Ph.D., looking for Wall Street, I can do it, I can make a fortune, there must be a formula for getting rich in this world, but I haven&#8217;t found it yet. That&#8217;s why the stock mutual fund industry has been around forever&#8211;because they have found a bunch of these people who meet the criteria set by investors as financial experts.<\/p>\n\n\n\n<p>Investors waited until they got older and used up all their time to compound interest before they discovered that Charles. Ellis was right, but it was too late. At this point the mutual fund industry has already made enough of your custodial fees and transaction fees, and then gives you a mediocre long-term reward, even less than ETF tracking broader market, but it&#8217;s too late.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"A_typical_example\"><\/span><strong>A typical example<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Because the average person thinks that the annualized return will increase by a single digit on average a year, most people will think that it is not a good stock. I was previously in &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/03\/04\/hp-important-good-company\/\" target=\"_blank\" rel=\"noreferrer noopener\">HP is an important and good company, but not a good stock?<\/a> &#8220;In this article, it is explained:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The stock price of HP (ticker: HPQ) has risen by 1028.88% in the past 20 years! Its annualized rate of return is 12.36%.<\/li>\n\n\n\n<li>Intel (ticker: INTC) was only 117.4% during the same period, and Intel&#8217;s annualized return was 0.81%, which is a very poor performance and should be the worst share price performance among large-cap stocks I know.<\/li>\n\n\n\n<li>The S&amp;P 500&#8217;s annualized return over the same period over the past 20 years has been 7.38%; it represents the broader U.S. stock market.<\/li>\n<\/ul>\n\n\n\n<p>The difference among the three is very large. Most of the well-known companies in the US stock market can not have such a performance as HP. I deliberately used Intel as a comparison. Because almost everyone will assume that Intel is still in the Dow Jones, but HP has been excluded from the Dow for many years, people must think that the Dow is authoritative, and the company that stays in the index must be better. <\/p>\n\n\n\n<p>Even if you don&#8217;t count on the Jones Index, Intel companies are bigger, well-known, and Hewlett-Packard is its downstream manufacturer. Most people must think that Intel is a good company in all aspects (including investment rate), and will not challenge these common sense or authority, let alone actual performance (that&#8217;s the point).<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Voting_behavior_in_the_stock_market\"><\/span><strong>Voting behavior in the stock market<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>But the problem is that common sense, authority, and most people&#8217;s beliefs\u2014these are unfounded and untenable. However, investors still stick to their own opinions regardless of this. I believe that even with these facts, most people still think Intel is worth investing in than HP, and that doesn&#8217;t change that opinion.<\/p>\n\n\n\n<p>This is the act of voting in the stock market, which is conformity.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Most_well-known_companies_have_poor_investment_returns\"><\/span><strong>Most well-known companies have poor investment returns<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The well-known business book &#8220;<a href=\"https:\/\/www.amazon.com\/Built-Last-Successful-Visionary-Essentials\/dp\/0060516402\" target=\"_blank\" rel=\"noreferrer noopener\">Built to Last<\/a>&#8221; has calculated that the stock price performance of companies before and after being listed in the Fortune 500, after being listed on the list (that is, after the company becomes famous), most of the performance is getting worse. You don&#8217;t believe this view!<\/p>\n\n\n\n<p>There is another example, that is Coca-Cola; for details, please refer to my &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/07\/02\/coca-cola-has-been-inferior-to-pepsi-in-and-even-return-rate-is-negative-in-past-10-years\/\" target=\"_blank\" rel=\"noreferrer noopener\">Coca-Cola has been inferior to Pepsi in and even return rate is negative in past 10 years!<\/a> &#8220;<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Half_of_Fortune_500_companies_lose_money\"><\/span><strong>Half of Fortune 500 companies lose money<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>I mentioned on 4-2 of my book &#8221; The Rules of Super Growth Stocks Investing &#8220;: Between 2008 and 2015, only 258 of the Fortune 500 companies were profitable; that is, 242 precisely, half of all businesses are losing money on the books. How is this possible?<\/p>\n\n\n\n<p>I mean that stock performance has nothing to do with a company&#8217;s reputation, but that&#8217;s not what the average person thinks. Most people have the &#8220;halo effect&#8221;, or the &#8220;watermelon effect&#8221;, and think that fame is everything (including its stock compensation). Remember we are doing investment, not voting. That&#8217;s why I wrote last year, &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/05\/02\/workplace-skills-no-help\/\" target=\"_blank\" rel=\"noreferrer noopener\">Workplace skills doesn&#8217;t help much in investment?<\/a>&#8221; If you hold the same opinion as crowd, it is impossible to make a lot of money, because most people think that famous companies is safe and profitable, and companies should be the top 500 companies. This is untrue.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"286\" height=\"169\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2022\/06\/Yesmagazine-1600x1200-1.jpg\" alt=\"Voting\" class=\"wp-image-9678\"\/><figcaption class=\"wp-element-caption\">Credit: Yesmagazine.org<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Closing_words\"><\/span><strong>Closing words<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>I want to remind everyone to think about what they want before investing.  What you really want? and do you know the company at all?  Benjamin Graham famously said: &#8220;In the short run, the market is a voting machine; in the long run, it is a weighing machine.&#8221;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Related_article\"><\/span>Related article<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/12\/04\/fall-to-lower-class\/\">You might unknowingly fall to lower class<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/06\/20\/follow-the-crowd-behaviors\/\">Follow the crowd, a behavior checklist<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/02\/28\/think-keep-sane-in-crowd\/\">In the crowd, it&#8217;s impossible to think independently or keep sane<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/09\/26\/out-of-the-ordinary\/\">How difficult to be out of the ordinary<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/01\/15\/crowd-get-lost\/\">The crowd tend to lose their judgment and get lost<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/20\/thinking-outsourced\/\" target=\"_blank\" rel=\"noreferrer noopener\">Thinking cannot be outsourced<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/01\/investment-is-not-voting\/\">Investing is not voting<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/02\/28\/think-keep-sane-in-crowd\/\">In the crowd, it&#8217;s impossible to think independently or keep sane<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/07\/efficient-market\/\" target=\"_blank\" rel=\"noreferrer noopener\">Efficient market<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/05\/02\/why-the-successful-skills-needed-for-stock-investment-is-opposite-of-successful-workplace-skills\/\">Workplace skills doesn&#8217;t help much in investment<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/05\/07\/why-successful-manager-usually-not-a-good-investor\/\" target=\"_blank\" rel=\"noreferrer noopener\">Why successful manager usually not a good investor?<\/a>&#8220;<\/li>\n<\/ul>\n\n\n\n<p><em><strong>Disclaimer<\/strong><\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The content of this site is the author\u2019s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.<\/em><\/li>\n\n\n\n<li><em>I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers&#8217; direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Investing is not voting,  mentioned the phrase &#8220;investing is not voting&#8221; in three places in my book &#8220;The Rules of Super Growth Stocks Investing&#8221;: 1-5, 5-4, and postscript.<\/p>\n","protected":false},"author":1,"featured_media":9678,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[71,50,65,737,68,13,14,17,245,70,779],"tags":[354,41],"class_list":["post-5722","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-out-of-the-ordinary","category-benjamin-graham","category-business-books","category-charles-ellis","category-insight-second-level-thinking","category-investing-behavior","category-investing-concept","category-investing-psychology","category-mutual-fund","category-patience","category-risks","tag-hpq","tag-intc"],"_links":{"self":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/5722","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/comments?post=5722"}],"version-history":[{"count":37,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/5722\/revisions"}],"predecessor-version":[{"id":40510,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/5722\/revisions\/40510"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media\/9678"}],"wp:attachment":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media?parent=5722"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/categories?post=5722"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/tags?post=5722"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}