Which one is more important in investing? Theme or Time???
This question may seem ridiculous to those who benefited from Thematic investing between 2014-2020.
Investing in the Tech (growth) stocks in the past decade made many a fortune. Those who invested in EV makers in march 2020 and got out before February 2021, made a fortune equal to the past decade of those who invested in the best Tech stocks. Those who invested in biotechnology companies like Moderna or Novavax also made a fortune in a year more than those who invested in the biggest Tech companies a decade ago.
The coin has flipped since February 2021:
Let's compare big techs as the winners of the past decade with big banks which are the winners of 2021:
Tesla Best performance in companies with +100 Billion USD Market Cap: almost 2400% gain in 83 weeks. (June 2019- Jan 2021)
Tesla Worst performance in companies with +100 Billion USD Market Cap: -11.5% (YTD) (Biggest position in ARk invest ETFs)
On the other hand, big financial institutions like Wells Fargo, Goldman Sachs, Bank of America, Charles Schwab, and Morgan Stanley had a terrible performance between 2010-2020 became the champions of companies with the best performance in 2021. These 5 are among the top 10 companies with the highest performance in 2021.
Wells Fargo: was a horrible investment with a -22% performance between 2010-2020. (Warren Buffet was a major shareholder)
Wells Fargo: The second best performance in companies with +100 Billion USD Market Cap in 2021: +63% gain in the last 5 months.
(Warren Buffet closed his position in Wells Fargo after 30 years before this happened)
Lessons to learn:
1- Timing in investing is a more important factor than Theme..!
2- Hot growth stocks will not stay hot forever..!
3- Even titans could make miscalculations
4- You can benefit from investing in any asset by choosing the right time to open and close the position.
5- Boring stocks can become hot in the future!
6- Money circulates in the market to find the best opportunities, Follow the money, you will never regret it.
Moshkelgosha
This question may seem ridiculous to those who benefited from Thematic investing between 2014-2020.
Investing in the Tech (growth) stocks in the past decade made many a fortune. Those who invested in EV makers in march 2020 and got out before February 2021, made a fortune equal to the past decade of those who invested in the best Tech stocks. Those who invested in biotechnology companies like Moderna or Novavax also made a fortune in a year more than those who invested in the biggest Tech companies a decade ago.
The coin has flipped since February 2021:
Let's compare big techs as the winners of the past decade with big banks which are the winners of 2021:
Tesla Best performance in companies with +100 Billion USD Market Cap: almost 2400% gain in 83 weeks. (June 2019- Jan 2021)
Tesla Worst performance in companies with +100 Billion USD Market Cap: -11.5% (YTD) (Biggest position in ARk invest ETFs)
On the other hand, big financial institutions like Wells Fargo, Goldman Sachs, Bank of America, Charles Schwab, and Morgan Stanley had a terrible performance between 2010-2020 became the champions of companies with the best performance in 2021. These 5 are among the top 10 companies with the highest performance in 2021.
Wells Fargo: was a horrible investment with a -22% performance between 2010-2020. (Warren Buffet was a major shareholder)
Wells Fargo: The second best performance in companies with +100 Billion USD Market Cap in 2021: +63% gain in the last 5 months.
(Warren Buffet closed his position in Wells Fargo after 30 years before this happened)
Lessons to learn:
1- Timing in investing is a more important factor than Theme..!
2- Hot growth stocks will not stay hot forever..!
3- Even titans could make miscalculations
4- You can benefit from investing in any asset by choosing the right time to open and close the position.
5- Boring stocks can become hot in the future!
6- Money circulates in the market to find the best opportunities, Follow the money, you will never regret it.
Moshkelgosha