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Having a good product is no indication that the stocks are good. - Stock price can be overvalued, even for that good product - A costly proccess to make that
by koonsolo 8y ago
Having a good product is no indication that the stocks are good.
- Stock price can be overvalued, even for that good product
- A costly proccess to make that fancy product could eat up the margins
- Company strategy, investment in the future etc need to be considered.
Basically you need to know how much a company is really worth to buy stocks, not just "I like their product"
- subjectHarold 8y agoAnd yet...his wife's granny ended up investing a couple of mil in a stock priced in the single digits that is now worth over $1500/share. Don't overthink things. Btw: if you actually knew what happened to the share price at that time (it was probably down 90% in a year) then you wouldn't call it anything other than what it is...a good decision.
- ambicapter 8y agoThis is pure anecdata and survivorship bias. I like bitcoin, and yet...
- eanzenberg 8y agoHolding amazon through a 90% decline is having nerves of steel. Liking bitcoin, that's just stupid.
- koonsolo 8y agoHindsight is 20/20. Investing 2 mil because "I like books" is never a good decision. If it works, you were lucky, not smart.
- mathattack 8y agoExactly. It’s “Is your view of the product quality and it’s impact on the company, industry and stock market price better than the aggregate wisdom of everyone betting on it?” Historically the answer is “Less than 49% of the time for most people, including professionals”