📈 Should You Watch Your Stocks or the Business Behind Them?

As an investor, it’s easy to get caught up in the daily ups and downs of the stock market.

One day your stock is up 5%. The next, it’s down 3%. It feels like a roller coaster—and many people think they need to ride every twist and turn.

But here’s a simple rule that has guided some of the world’s best investors, including Warren Buffett:

If the business does well, the stock eventually follows.

Let’s unpack why that matters—and how it can help you become a smarter investor.

✅ What Does “Doing Well” Actually Mean?

Imagine you run a small coffee shop. How do you know if things are going well?

• More Customers = More Revenue
  If more people walk in every day and buy your coffee, your total sales go up. That’s revenue.
• Making a Profit = Healthy Earnings
  After paying for coffee beans, rent, and staff, you still have money left over. That’s profit—or earnings.
• Growing Bigger = Real Growth
  Maybe you open a second shop, or start offering pastries and lunch. That’s business expansion—just like how companies grow by entering new markets or launching new products.

When a public company grows its sales, makes strong profits, and reinvests smartly, it’s doing well—and creating real long-term value.

🐕 The Dog-and-Owner Analogy

Think of the business as a person walking steadily down a path.
Now think of the stock price as their energetic dog on a leash.

The dog zigs and zags, runs ahead, or lags behind—chasing news, rumors, or market panic. But no matter how wild it gets, the dog is still attached to the owner. Over time, it has to follow.

That’s how stocks work too.

Short-term price swings are noisy. But over time, the stock price follows the direction of the business itself.

🎯 Why This Matters to You

This principle gives you a clear focus.

Instead of stressing over daily price changes, ask better questions:

• Is the company growing sales?
• Is it earning solid profits?
• Does it have a smart plan for long-term growth?

When you shift your attention from the stock chart to the business behind it, you stop guessing—and start investing.

You’re not just buying a ticker symbol. You’re buying a slice of a real business. And if that business does well?

Chances are, your investment will too.

Bottom Line:
📌 Don’t just watch the stock. Watch the business.
Because if the business does well, the stock—eventually—follows.