THE SP and conviction .30 Aug 2021 14:23
THE SP is in NO WAY connected to the value of the company or ongoing work and bids - If you would like an example of what you need as an Investor rather than a troll or next rainbow you should read this " David Gardner spoke at our virtual MicroCapClub event this past September. His optimism and enthusiasm were quite apparent when he talked about his portfolio and strategy. It made me evolve my thinking in some ways. In the past I’ve invested in some good businesses with good fundamentals, but I didn’t connect with the product or service. Naturally I would focus too much on the quarterly financials because that’s why I was investing in them….for the next set of numbers. I’ve concluded these types of investments are a distraction.
If you aren’t excited about the future, you are in the wrong investments. You need to own investments whose mission, management, and products/services excite and energize you. Why? It’s the only way you will be able to hold them. I’ve added this concept as an overarching filter to my diligence process. I exited a couple positions in 2020 that didn’t meet this standard.
To achieve a multi-bagger in the portfolio, you have to hold a multi-bagger in the portfolio. Holding can be excruciating. Especially winners. I know it’s hard to believe given the market conditions so far in 2021, but my largest position is down 40% since the beginning of the year. Nothing has changed with the business, it’s the normal ebbs and flows of holding a winner.
Here is what a multi-bagger looks like over several years:
$1 – $2 – $2 – $3 – $2 – $3 – $4 – $6 – $6 – $12
$1 to $12 in 10 years. This is a 28% compounded annual growth rate (CAGR). This is a phenomenal return. Investors love to consolidate success down to one number. The bad thing about representing growth as a CAGR is it smooths out the volatility and pain to achieve it. High CAGRs aren’t smooth linear lines ascending to heaven. They are rollercoasters.Here is what a multi-bagger looks like over several years:
$1 – $2 – $2 – $3 – $2 – $3 – $4 – $6 – $6 – $12
$1 to $12 in 10 years. This is a 28% compounded annual growth rate (CAGR). This is a phenomenal return. Investors love to consolidate success down to one number. The bad thing about representing growth as a CAGR is it smooths out the volatility and pain to achieve it. High CAGRs aren’t smooth linear lines ascending to heaven. They are rollercoasters.
You will have to hold while the stock doubles in a year. You will have to hold as the stock pulls back 50% from its highs. You will have to hold as the stock goes nowhere for months, quarters, maybe years, as fundamentals backfill into a higher stock price. You will have to hold as expectations get too high or management goes through growing pains. You will have to hold as the stock is cheap and expensive. You will have to hold while the stock is loved and hated by other investors. " FULL article LINK HERE -(microchipclub) https://microcapclub.com/202
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