FunkyKO said:
You mean guys who made their money before information flowed freely and real-time?
Although they both are legends, Buffett hasn't beaten the s&p index.....which caused them to take a huge position in aapl.
I do love me some Dairy Queen though.
Well, I am not as value focused as buffet was, but in other ways like the business architecture, fundamentals, product, execution, and some consideration for valuation. Just because the internet exists doesn't mean you should overpay for profits. Ultimately shares are commodities whose price are determined by investor demand. Profits drive investor demand, so does hype, but hype is much harder to predict and much less reliable.
I also try and incorporate the 80/20 principle, find the 20% likely to win, and cut out those likely to be in the lagging 80%. That is actually similar to the ARK approach. And for that reason I'm not a fan of index funds that just own the whole broad market.
And finally, I think it's important to have enough diversification where one position crashing can't wipe you out.
There is less reason to over pay for profits in the modern Information age than there was decades ago. The game is a little bit different because growth companies are likely to be more debt fueled than in the past as money can be burned faster and businesses scaled more rapidly than ever.
At the end of the day the share price moves on supply and demand just like everything else. The best predictor of a stable demand for a company's shares is the level of investor confidence that the company will be profitable.