Would you pay $10,000 today in return for $1,000,000 tomorrow?
Easy question, right? Not exactly...
If you invested $10,000 in a company today and the share price dropped 50%, it's not so easy to stomach the drop. However, if any lessons have been learned, those lessons of wealth creation are often discovered with the power of patience.
2020 was an unpredictable year but the fundamentals of investing remained the same. The fundamentals such as:
1. Buy companies that you understand
2. Wait patiently for the share price to reflect the company's true value
3. Focus on companies with growing revenue, low debt/restructuring of debt then allow compound interest to work in your favor
Sounds simple but so many investors get caught up in the news and price targets and the list goes on that the fundamentals are lost and so are the potential profits.
Did you know 10,000 shares or a combination of any the companies featured in the charts is worth a minimum of $100,000 -$1,000,000 today. If you had bought 10,000 shares of Pinterest, Stitch Fix or GameStop when we first recommended them to members here and held until January, then you would be looking at $1,000,000 in your investment portfolio in less that a 12 month period. Wow!
That should be exciting, right?
If you watched the video above, I hope you can feel the energy because there is so much power in patience.
And if you're still not convinced, keep reading...
If you had bought Coty at $2.89 and held on to it, your initial investment would have more than doubled.
If you had $5,000 (732 shares) invested in Gamestop at $6.83 when we first recommended it in September and sold at its peak then your portfolio would have increased 50-fold by selling in January at it peak.
Coty and Gamestop while profitable in different ways show two important sides of holding and selling. With Coty, it is a growing company that is below its intrinsic value. So it would be a great example of staying the course with the power of patience.
On the other hand, when Gamestop grew to over 3,000% this was a quick win and a lesson from Warren Buffett "Be fearful when others are greedy".
Cue the confetti: TIME TO SELL!
Companies trading well above their intrinsic value can be dangerous territory especially when you're unsure of where the top may be.
Essentially, buying and holding is equally as important as knowing when to exit.
Check out the
Stock Up Guide
we provided to Members in November 2020 as you continue your investing journey because the best investment advice ever received is that "PATIENCE IS POWER."