Time or Theme?Which one is more important in investing? Theme or Time???
This question may seem ridiculous to those who benefited from Thematic investing between 2014-2020.
Investing in the Tech (growth) stocks in the past decade made many a fortune. Those who invested in EV makers in march 2020 and got out before February 2021, made a fortune equal to the past decade of those who invested in the best Tech stocks. Those who invested in biotechnology companies like Moderna or Novavax also made a fortune in a year more than those who invested in the biggest Tech companies a decade ago.
The coin has flipped since February 2021:
Let's compare big techs as the winners of the past decade with big banks which are the winners of 2021:
Tesla Best performance in companies with +100 Billion USD Market Cap: almost 2400% gain in 83 weeks. (June 2019- Jan 2021)
Tesla Worst performance in companies with +100 Billion USD Market Cap: -11.5% (YTD) (Biggest position in ARk invest ETFs)
On the other hand, big financial institutions like Wells Fargo, Goldman Sachs, Bank of America, Charles Schwab, and Morgan Stanley had a terrible performance between 2010-2020 became the champions of companies with the best performance in 2021. These 5 are among the top 10 companies with the highest performance in 2021.
Wells Fargo: was a horrible investment with a -22% performance between 2010-2020. (Warren Buffet was a major shareholder)
Wells Fargo: The second best performance in companies with +100 Billion USD Market Cap in 2021: +63% gain in the last 5 months.
(Warren Buffet closed his position in Wells Fargo after 30 years before this happened)
Lessons to learn:
1- Timing in investing is a more important factor than Theme..!
2- Hot growth stocks will not stay hot forever..!
3- Even titans could make miscalculations
4- You can benefit from investing in any asset by choosing the right time to open and close the position.
5- Boring stocks can become hot in the future!
6- Money circulates in the market to find the best opportunities, Follow the money, you will never regret it.
Moshkelgosha
