Opportunity Costs
Right now social media is obsessed. Though not with the same stocks. Some people are obsessed with Abivax or Sellas (dumb.) Someone people are obsessed with catching the bottom of software stocks like Adobe and Microsoft. Others are obsessed with the impending -70% market crash everyone sees coming but no one knows when its coming and is confident enough to short the market.
If you sit in a trade that goes sideways or down for a year how much money have you missed out on? We talk about 10,20,50% returns as laudable and praise worth but how good are they, really?
Bill Gates is worth around $100 billion dollars. If he had just held Microsoft stock he would be worth $1.2 trillion dollars today. Ignore the magnitude there as it is misleading. If you worked your entire life and ended up with $100k instead of $1.2 million would you consider that result a success? Mistakes like that are life changing.
A return of 100% is satisfying in that you are validated. You were right. A return of 100% in a week though is far more substantial than one that takes two years. In a lot of ways, luck is more rewarding literally.
Do you know who convinced him to diversify away from Microsoft?
If Bill Gates had just invested $10 million in bitcoin in 2012 that investment alone would be worth $120 billion today. That single decision would have been more protective than where he has ended up after founding one of the most famous companies on Earth.
There is always an opportunity better than the the one you are in. The best traders are always paying attention. What tends to happen is people take that doubt that builds over time as your chosen trade goes sideways and direct it at other opinions instead of trying to find other stocks that might be better.
This chart shows the returns from every day if you had bought the best stock for the S&P stocks and overall market. For example, buying AGL 0.00%↑ in February or March was the smartest play.
This chart shows you what you missed out. What we all have missed out on. And this year is not particularly special.
A market participant is much better served spending time researching other stocks instead of justifying whatever stock you are in. Because no matter what stock you are in - it isn’t likely to be the right one.
That is just the odds.
So to answer that question I posed earlier sitting 6 months in the wrong stock cost us 1000%.
-AJ