Some friends were pretty haunted by the growth stocks they invested in during the Covid period.
Covid was such a weird period that it pulled forward the sales and revenue growth of many companies but also almost bankrupted a lot of companies.
It was unsurprising to hear people mention they made 200% on their portfolio in these growth stocks. These anecdotal comments seeded a lot of interests in people around me to pivot their portfolio away from these growth stocks.
But they were shocked that when Covid ended, the share prices of these growth companies came down massively.
The stock price of these companies looks something like Roku over here. Roku is also one of the companies that got pulled forward as we sat at home and watch more TV, bought more TV, and TV show subscriptions.
Could we see what has came coming during that period?
You could, if you are a true contrarian that is very experienced in the market that is a staunch fundamentalist.
We have to battle against our behavior, though, and it wasn’t easy for many of us during those periods.
If we did not fast forward to today, would you have imagine the share price to be like the first chart that I showed you?
We will likely be in deeper thoughts about the growth in subscriptions, whether they are able to retain existing customers and how these impact the bottomline.
We tend to focus on our attempt to value the company based on fundamentals on a bottoms up basis.
I think only the real old heads would have experienced manias to detect that we really have consider that this is not normal and it is more rational
