Investors often confuse stocks with the stock market. When markets are going up, the notion is to buy. When markets decline, emotional tendencies cause many to sell. So in essence, market rallies and declines feed off of themselves. An investor who can separate stocks from the stock market, however, doesn't have to succumb to these market symptoms. (For background reading, see The Madness Of Crowds.)

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A Stock or a Business?
The only way to succeed in separating stocks from stock markets is to view any share of stock as a piece of a business. Most business owners don't sell their companies just because someone has told them their business is worth 15% less. Yet when share prices decline 15%, many investors do just that - sell the business off to the low bidder. Shares in spirits maker Central European Distribution (Nasdaq:CEDC) declined nearly 40% this week on news of a bad quarter. While it certainly doesn't mean the company is a buy, the price has gotten a whole lot better. CEDC is a leading producer of spirits in Poland and Russia and market share has only grown over the years as the appetite for beer, wine, and other spirits persists. Despite the uncertainty of the business climate in areas such as Russia, it's still a huge market for the spirits business. Larger players like Diageo (NYSE:DEO) could find a name like CEDC an attractive way to expand in those regions. (For related reading, see Is Poland The Best European Investment?)

Businesslike Approach
A businesslike approach to investing enables investors to separate the long-term from the short-term. A businesslike approach also enables you to focus on price for what it is - a determinant of value. I like Google (Nasdaq:GOOG) and use it all the time, but at the current price of $610 a share and 23 times earnings, I don't like it as much as an investment. On the other hand, I use Microsoft (Nasdaq:MSFT) products and at $26 per share, 11 times earnings and a dividend yield of 2.4%, it looks like a quality bet at the current price.

A share of stock is an ownership interest in a business. Take the approach of investing in a business through the process of buying a share of stock. (For related reading, see Constellation Brands Remains A Work In Progress.)

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