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The Agony of High Returns
1/ Just read Morgan Housel's article: "The Agony of High Returns."
The article basically goes over what an investor must face in the chase of high returns and is pretty graphical showing how the best performing stocks came with quite a deal of pain for holders.
Some quotes that stood out to me 👇🏻
"It's hard to grasp how the best-performing stock of the last 20 years could spend the majority of its time with returns that would make you want to vomit."
$MNST suffered 4 separate +50% drops, lost more than 2/3s of its value twice and more than 3/4s once.
"On the way to making serious money, you spend a lot of time losing serious money. It's a reality anyone investing in stocks, no matter what you own, has to face."
This table shows how the best 10 stocks to hold from 1995 to 2015 fared. It's not pretty:
"What now looks like a slam-dunk story was, at any given time in the last 20 years, an easy story to criticize. That's why shares were so volatile."
"Capitalism is fierce about denying you something for nothing, and higher returns tend to demand the mental agony of higher volatility."
The Motley Fool
The Agony of High Returns | The Motley Fool
Even with a time machine, a lot of people wouldn't want to own the best-performing stocks.
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