Unfair Advantage When you perform your research of a public company by looking at a prospectus of a public company, you will see a category known as “selling shareholders.” These are the shareholders who own large blocks of the stock, say 1 million to 10 million shares. They are called “selling shareholders” because they sold only a percentage of their company and received a large block of shares. Building a business and taking your company public via an IPO (initial public offering) is another form of printing money, in this case, printing shares, or stock certificates. When I took my gold mine public, Kim and I were selling shareholders, not buying shareholders. There are differences between selling shareholders, preferred shareholders, and common shareholders. This is why fair share is an oxymoron. 5. Mutual Fund There is nothing mutual about a mutual fund. A better term would be one-sided fund.
This does not mean I do not like mutual funds. Personally, I love mutual funds because mutual funds provide me the money to invest.
When I took my gold mine public via the IPO, it was a group of mutual-fund companies who purchased most of the stocks we offered. Mutual funds are designed for people who know nothing about investing and feel more comfortable having a fund manager pick their common stocks for them. The problem is that the investor puts up 100 percent of the money, takes 100 percent of the risk and receives only 20 percent of the profits (if there are profits). The mutual-fund company takes 80 percent of the investor’s money via management fees and expenses. To me, this is a one-sided fund, not a mutual fund. Making matters worse, taxes are not good on mutual funds. 129
by Rich Dad, Robert Kiyosaki