For all the stock pickers (research analysts etc): how do you deal with the various studies on random stock picking vs funds performance? Can you do your job without thinking that your considerations may be just luck? I’m asking this as a person interested in the field
I look for companies that I believe are undervalued and can double in a decade. That is my preferred holding period 10 years-forever. I’ll give you my best hot and miss. A year and a half ago I looked at Tesla and said “this company should be btw 250-300 right now and will likely be worth 1k a share within a decade given the push for electric.” I saw immediate growth and LT growth. My view was to sell after it a decade or so. I’m 15x right now. Also a year and a half ago, I bought ACB because I figured over the next 10 years the entire US will be legal and they are an industry leader. I’m down 75% on it. I’m still holding in both of these examples because I believe in them long term.
Do you believe rolls royce is undervalued
I have done zero due diligence on rolls Royce so I cannot opine on that.
Everyone is a genius in a bull market. The real measuring stick is who survives in a bear market.
The key to surviving a bear market is to plan ahead of it and have enough cash on hand that (a) you can ride out the market slump and (b) you can double down during the slump.
Not really. The real test is how you do across market cycles. You may crash in a bear market, but it doesn’t matter if your returns in a bull market far outweigh that. Basically, people only care about how much you return over the long term.
ARKG and chill
Pton and chill.
Short term predictions are mainly luck. But there’s actually a few analysts who have been able to consistently pick winners for each category, using a principle-first approach. One of my friends actually lead early investments into Google, Amazon, and Facebook. He only entered 7 positions in the past 5 years and held on. His annual returns averaged at 37% over 11 years. The holding period of each investment is around 4 years. But most analysts focus on the short term (quarter by quarter) and focus too much on numbers over core company fundamentals (business moat, business extensibility, network effects, value proposition). Hence most analysts don’t do well because quarterly performance doesn’t say much over long-term returns (which are larger than short-term movements).
What is he picking next 😀
Probably rolls royce