Row 31254

Row ID: 31254 | Dataset Entry | Axioma AXP Content Repository

Content Data

This page contains data entry 31254 from the Axioma AXP content repository. The structured data below represents the complete record for this entry.

Hello there,

Totally hypothetical situation for a theory question.

I get the ideia that opportunity cost is comparing an investment I am about to make with another one, usually a risk free one.

But something comes to my mind when comparing risk free investments with investing in a business: when I buy bonds with 100.000 I will keep the "main" value and it will grow (and pay coupons if it is the case). Let's say it grows by 5% a year.

(don't want to get into the discussion that I should keep the bond until maturity date. ).

If I invest in a coffee shop the same value, the 100.000 is gone. I bought chairs, machines, etc. It will generate profits of 10.000 a year. Looking at the profit side, it was a better decision than the bond.

But with with the bond I have the profit and the initial value invested. With the coffee shop I only have the profits.

(Yes, I can sell the chairs and the machines but very likely for less than what I bought. Yes, I also have the business I can sell).

So my question is: how to take that into consideration? Do you do a valuation of the business and sum it to the profits?

What do you think?

Help me clear my mind. Thanks!

FieldValue
text Hello there, Totally hypothetical situation for a theory question. I get the ideia that opportunity cost is comparing an investment I am about to make with another one, usually a risk free one. But something comes to my mind when comparing risk free investments with investing in a business: when I buy bonds with 100.000 I will keep the "main" value and it will grow (and pay coupons if it is the case). Let's say it grows by 5% a year. (don't want to get into the discussion that I should keep …
label r/investing
dataType post
communityName r/investing
datetime 2024-05-21
username_encoded Z0FBQUFBQm5Lak1HblFxRFd3WXRKY0ZyWDB4VEFmM0tjNEZQSWw5V3NfVHBtOGtRbV9xZzlIcTVmVzVrZEViWkhjRmYzbndfc21HODBZUXZSaGpFQVNFVXZGam5ESEdNN0E9PQ==
url_encoded Z0FBQUFBQm5Lak9WX2JvWW45MkI4LVNQN1hDeE4xRUxtUnAxUk16aUhSa2FtelpSdmFwRERpN01Oc1Z0cjVSSUdFamdhcUlNa3I5bnQ0alZnYzBRcmYyZm1XVjB6blFkUU1qc21wVWE5enNYMXlCQ2M3eFlOa0ZFNHY2MzlmRnFLVlNWSzlXNUFrcFZLdzdRb3RQWFdiZ0luLWhocU1yYjY1T3RVUmx1X3JyejJSUm5PZjJMYkN5U19mSG14aGNOMjQ4SXZGcVUydXNzZUh3SDMySTduM3VHc2kxTWk2T3c4QT09

Raw Record

{
  "text": "Hello there,\n\nTotally hypothetical situation for a theory question.\n\nI get the ideia that opportunity cost is comparing an investment I am about to make with another one, usually a risk free one.\n\nBut something comes to my mind when comparing risk free investments with investing in a business: when I buy bonds with 100.000 I will keep the \"main\" value and it will grow (and pay coupons if it is the case). Let's say it grows by 5% a year.\n\n(don't want to get into the discussion that I should keep the bond until maturity date. ).\n\n  \nIf I invest in a coffee shop the same value, the 100.000 is gone. I bought chairs, machines, etc. It will generate profits of 10.000 a year.  Looking at the profit side, it was a better decision than the bond. \n\n  \nBut with with the bond I have the profit and the initial value invested.  With the coffee shop I only have the profits.\n\n(Yes, I can sell the chairs and the machines but very likely for less than what I bought. Yes, I also have the business I can sell). \n\nSo my question is: how to take that into consideration? Do you do a valuation of the business and sum it to the profits? \n\nWhat do you think?\n\nHelp me clear my mind. Thanks!\n\n",
  "label": "r/investing",
  "dataType": "post",
  "communityName": "r/investing",
  "datetime": "2024-05-21",
  "username_encoded": "Z0FBQUFBQm5Lak1HblFxRFd3WXRKY0ZyWDB4VEFmM0tjNEZQSWw5V3NfVHBtOGtRbV9xZzlIcTVmVzVrZEViWkhjRmYzbndfc21HODBZUXZSaGpFQVNFVXZGam5ESEdNN0E9PQ==",
  "url_encoded": "Z0FBQUFBQm5Lak9WX2JvWW45MkI4LVNQN1hDeE4xRUxtUnAxUk16aUhSa2FtelpSdmFwRERpN01Oc1Z0cjVSSUdFamdhcUlNa3I5bnQ0alZnYzBRcmYyZm1XVjB6blFkUU1qc21wVWE5enNYMXlCQ2M3eFlOa0ZFNHY2MzlmRnFLVlNWSzlXNUFrcFZLdzdRb3RQWFdiZ0luLWhocU1yYjY1T3RVUmx1X3JyejJSUm5PZjJMYkN5U19mSG14aGNOMjQ4SXZGcVUydXNzZUh3SDMySTduM3VHc2kxTWk2T3c4QT09"
}
Explore Dataset Explore Row

Entry Information