Forum Home | Log in | Signup | My Page | Rules | FAQ | Boards | Members | Search
« 6TH POPE Home | Email msg. | Reply to msg. | Post new | Board info. Previous | Home | Next

Re: 12 Cheap Utility Stocks to Buy According to Analysts

By: Zimbler0 in 6TH POPE | Recommend this post (0)
Fri, 14 Apr 23 10:04 PM | 28 view(s)
Boardmark this board | 6th Edition Pope Board 		Msg. 41790 of 60008
(This msg. is a reply to 41770 by Decomposed)
Jump:
Jump to board:
Jump to msg. #

Decomposed > Sure it did. But do you understand that a stock that grows at 33% per year but loses 100% of its value every ten years is a CRAZY good deal?


I see your point, De.

But for a 'Buy and Hold' type investor . . . Not so much.

And, I'm happy that You are making good money that way.

Zim.




Avatar

Mad Poet Strikes Again.

» You can also:
- - - - -
The above is a reply to the following message:
Re: 12 Cheap Utility Stocks to Buy According to Analysts
By: Decomposed in 6TH POPE
Fri, 14 Apr 23 3:04 AM 		Msg. 41770 of 60008

Zimbler0:

Re: “I take it that the sort of bankruptcy 'they' went through didn't involve share-holders getting wiped out?”Sure it did. But do you understand that a stock that grows at 33% per year but loses 100% of its value every ten years is a CRAZY good deal? It will, on average, grow 13-fold before getting wiped out. There's plenty of time to get your seed money out. Such a stock is a tremendous BUY nine years out of ten... even though it's an awful buy-and-hold.

BTW, I'm just trying to make a point. PCG won't have a 33% return every year. But neither will it fail every ten years. The point I'm hoping to make is that stocks can be greatly undervalued even if they aren't great companies. I've done fairly well in finding risky companies that rose tenfold and more. And for every one of those I found, I found several that cost me a very large chunk (sometimes even 100%) of my investment. But do the math and you'll see that this can be a terrific strategy so long as you consistently have fewer than NINE wipeouts per ten-bagger. And I have.

Here's another way to look at it:

An investor has $10,000. He puts $1,000 into ten risky companies. One of the ten is a ten bagger. The other nine lose everything. The investor is EVEN. If he does any better than this, he's money ahead, maybe even far ahead.

My failure rate hasn't been anywhere near as bad as the scenario I just outlined.





« 6TH POPE Home | Email msg. | Reply to msg. | Post new | Board info. Previous | Home | Next