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Stock investments are no gamble: Japanese economist
Investing in stocks is not the same as gambling, as many people seem to think it is, according to a Japanese senior economist and journalist.
* Lao journalists learn stock market reporting
Speaking at the Economic Media and Securities Market Seminar at the National University of Laos' Lao-Japan Human Resource Development Institute on Monday, Mr Masakata Maeda, a financial journalist from Nikkei Inc, pointed out the differences between buying stocks and gambling.
Gambling is a zero sum game, in which the gambler has choices that will either win or lose money, said Mr Maeda, while in stock trading the investor can get middle and long term returns if he or she can manage the risks.
Mr Maeda, who has been working as a financial journalist for 20 years, said a stock market contributes to the sustainable economic growth of a country, as well as more transparent management of corporations, ensuring security and returns for investors.
He said a gambler had to pray for help to win, while a stock trader needed to study the companies they are going to invest in and assess the business climate to gain profit. Successful investors must continually update their knowledge so they can make the right decision to buy and sell stock as prices fluctuate in accordance with investor confidence, which is in turn influenced by company information.
According to Mr Maeda, if people continually gamble for a long time they are more likely to lose money, while most people buying stocks over the same period of time can accumulate wealth.
He also noted that if gamblers were to prevail, they would bring the country into ruin, while the stock market can make the country more prosperous, as businesses gain capital from investors so they can expand, creating more jobs and boosting incomes.
Nikkei Inc, the leading Japanese economic and financial media corporation, is joining forces with Lao Ministry of Information and Culture, Lao Press in Foreign Languages, Japan International Cooperation Agency and Lao-Japan Human Resource Development Centre to build the capacity of Lao journalists to report on the nation's newly opened stock market, which began trading on January 11.
About 25 journalists from Lao print and electronic media attended Monday's seminar together with university scholars.
The Lao Securities Exchange building opened in October 2010, and the start of trading last week allowed the two state owned enterprises of BCEL and EDL-Gen to issue shares.
The government aims to mobilise as much as US$8 billion between now and 2015 by issuing shares and bonds, helping to secure the sustainable growth of the Lao economy.
vientiane times
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