Where is the new opportunity?

We often get asked about “the next big opportunity” in investing. It’s a fair question to ask, but what if we told you that even if we recommended “the next Apple” to most investors that it likely wouldn’t matter.

Why, you ask?

The fact is, even if we offered you a guaranteed winner you probably wouldn’t stick with it anyways.

Not so sure?

Let’s take a look at the deeper cut. We like using Apple as an example because people can relate to it… it’s one of the most notorious “if I only would have bought __ stock, I would be rich now” investments. From 1998-Present, shares of AAPL went up over 100 fold (10,000%)… roughly from $4/share to $531/share! But as Paul Harvey used to say, “now – for the rest of the story.”

For anyone to have fully participated in this spectacular price appreciation, they also had to sit through 6 stomach churning corrections that history suggests tested even the most committed believers in the company.

Let’s take a look at all six:

• First: -80% (2000-2002)
• Second: -25% (2005)
• Third: -40% (2006)
• Fourth: -40% (2008)
• Fifth: -50% (2008-2009)
• Sixth: -45% (2012-2013)

Of course it’s easy to dream about investing $10,000 and having it turn into over $1,000,000… but do you think you could have stuck it out through those tough times?  Would you have held your position when it was down 80% or would you have second guessed yourself and your initial reasons for buying?  Would you have panicked and sold?

The lesson here is articulated best by the legendary trader Jesse Livermore: “Men who can both be right and sit tight are uncommon… It takes incredible fortitude and discipline.”

Categorized in: Blog

This post was written by Conscient Capital