Understand the investment in stock market in an easy way. Part 2.

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We continue with our article "understand the investment in a simple way". If you didn't have the chance to see the first part, you can go to this link: understand the investment in a way easy-part 1. We will then respond to some questions that surfaced. To begin, one of the questions is...is why people's Bank and not Santander?. Therefore, I chose as an example the People's Bank in order to understand some things. The number one point is that people's Bank was not named as a buy recommendation. Point number two, is that we chose a bank value as that rising rates benefit Bank, and has been demonstrated as well has been.

To begin, following the advice of Warren Buffett, we ask a question: does is going to continue to exist Banco Popular in 10 years? Nobody can know it, but certainly the logic tells us that both the people as the Santander and BBVA will remain there, so with the passage of time these actions tend to be revalued by inertia and the own inflation.

Having said that, I I opted for Banco Popular because in business size is less than the of the Santander and therefore has more likelihood of growth. Let's say that a 12 year old boy is more likely to grow than one with 17, although both can grow.

Probably, as argued Gregory Horga, the problem with Banco Popular is that it has a national business and soon spread internationally, what is at stake great part of its business within the Spanish economy.

A point that is playing in favor of Banco Popular, is that their actions are touching the ground, so if you get a little more "pot effect" would occur (action touches ground and enters purchase recommendations). This should not take it at the bottom of the letter, because that could be the case that stays on the ground definitely and there is the break-up of the company. But let us not forget that it is a Bank and at least in Spain, they are like "termininator". There is no way to collapse them.

In summary, we chose popular because:

Not still purchase recommendations, rising rates would benefit from equally modoPorque has released several profitable deposits to attract foreign capital.Because it has potential for growth.Because its action is cheap (look at this point) the next day for our article, we invest in people's Bank and at the same time in Banco Santander. Similarly we could have done so in BBVA, that the entire banking system Spanish, he was going to upload, that was clear.We buy Popular 4.15 € per share and buy Santander 8.15 € per share.People's situation: to today is listed to 4.39€. Bearing in mind that with 10,000€ you can acquire 2,409 shares. The gain today is 575 €. (not counting with the Commission)Situation of Santander: to today is listed to 8.62€. If we look we can say that it has been more profitable than Banco Popular, but the reality is that with € 10,000 you purchase only 1227 actions, which are half of those acquired with the Popular, which is why the profitability of the SantanderIt has curiously been 576 €. Exactly like Popular.De there the importance of buying something cheap, because in case of rise, with less upload, it may be a more worthwhile investment.And finally, we once again appointed councils of purchase by analysts are not much better than when you use your own common sense.This article is going to have a third party to comment on some of the things that I'm seeing in foreign investment in stock exchangeforums, where you can receive very good advice and sometimes confusion by professionals who have forgotten that the stock market is a much more basic system that sometimes want us to believe. I accept comments thereon.Tweet