To The Moon

If I’ve done my due diligence and invested in a certain stock, I’ll not sell it even if it turns out to be a winner right after I bought. I would let the winner runs its course over time and hopefully becomes a multi bagger. Likewise, if the fundamentals of the company remains intact, I’ll not relinquish my holding even if it turns out to be a loser in the short term.

“When stocks are attractive, you buy them. Sure, they can go lower. I’ve bought stocks at $12 that went to $2, but then they later went to $30”, said Peter Lynch, who was the renowned manager of the Magellan Fund at Fidelity Investments between 1977 to 1990, during which the fund returns were consistently more than double those of the S&P 500 stock market index, making Magellan Fund the best-performing mutual fund in the world during the period.

I could not agree more from my personal experience for staying invested in fundamentally strong companies, when short-term losers turn out to be long-term winners. In fact, statistical data has shown that time in the market would consistently generate higher returns than timing the market.

As long as I’m not trading on margins or investing with funds I cannot afford to lose, I’m not worried about short-term market turmoils. In fact, I look forward to buying opportunities on fundamentally strong companies whose share prices are unfairly depressed.

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