As an investor, I believe we should be able to differentiate between Good companies and Good shares.
An analogy to explain the logic-
Telsa was a good (or bad) company last year and it is more or less the same kind of company this year too (can be good or bad depending on which side you are). But tesla’s share price at 400 USD last year vs 100 USD last week is a sea change in the stock story.
Think of Tesla Investors who invested last year thinking of themselves as long term investors. How much time would it take for them to recover their initial investment? May be not much, but do we want to be in that boat?
Good companies can be bad investments and bad companies can be good investments too. It all depends on the valuation and the business cycle. As a retail investor, we have to think about our Returns and not get too much attached to a company.
Disclosure- have burnt my hands with ‘Good companies at any valuations’ concept in the past.
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