In investment, just like in comedy, timing is essential. Your thesis could be 100% correct but you buy (or sell) at the wrong time, you can end up 100% wrong (i.e. lose a ton of money). This is most apparent with Ark funds. It’s quite possible their theses about different companies they buy into are correct, but they buying in at the wrong time makes that thesis invalid. Look for example at their genomics revolution etf: it’s a very exciting area with a lot going on and a lot humanity-changing potential. But, as a business is extremely experimental and speculative at this point. Look at pacb, bli, psnl (but there are dozens more holdings just like that in the fund): Ark bought with both hands all the way through the 2021 top at absolutely insane multiples with zero justification. They bought on the promise and narrative, not on actual numbers and business. Most of these names are at the brink of insolvency and in spite of being 80-90% off their ATHs still have more room to fall. 1/
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@MonkeyPoxGenius @NumberWang great reminder re: drawdowns. Of course learning this hard way (probably rudimentary break even analysis). X-axis drawdown vs Y-axis gain needed to BE to original. 100% to BE after 50% drawdown, 400% to BE after 80% drawdown etc 😧😳👇
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