Year in, year out; the highly overvalued, secular growers rally hard and the undervalued but mature companies disappoint.
Business growth is the driver of market cap (stock) growth.
Pretty tough for a low growth mature business (no matter how cheap) to embark on a monster run.
Business growth is the driver of market cap (stock) growth.
Pretty tough for a low growth mature business (no matter how cheap) to embark on a monster run.
2) Here is the evidence -
Look at the 10-year returns of the 'overvalued/bubble' stocks and now check out the performance of the 'bargain/value' stocks!
Chart from @ycharts
Look at the 10-year returns of the 'overvalued/bubble' stocks and now check out the performance of the 'bargain/value' stocks!
Chart from @ycharts
3) Here, I've gone back even further (2002) -
Look at the returns of the rapidly growing, 'overvalued' stocks and now compare those with the returns from the 'safe, undervalued, high cash flow' stocks.
What do you see? What would you rather own?
Chart from @ycharts
Look at the returns of the rapidly growing, 'overvalued' stocks and now compare those with the returns from the 'safe, undervalued, high cash flow' stocks.
What do you see? What would you rather own?
Chart from @ycharts
