210 | Cashing in on Excitement

There are only three ways to make money investing.

• Lend money to someone who pays you while they borrow* (interest)
• Own something that makes money and pays the profits to you (dividends)
• Own something while the excitement around it grows (capital gains)

The last way offers the most upside, but it's impossible to predict.

Sometimes profits trigger excitement around a company.

That excitement rewards the founders.

Sometimes excitement surges, but a company never turns a profit and excitement fades.

That excitement rewards the lucky (or the reckless!).

Sometimes a company is exciting and profitable.

That excitement rewards the patient.

The only way to cash-in on excitement is to own the company...

While the excitement builds.

If you wait for excitement to grow, you've missed out.

If you're not a founder, be careful.

*Ideally, they return whatever they borrowed at the end.