Hold rule breakers through extreme volatility
The guest argued that investors should hold high-conviction 'rule breaker' stocks through deep drawdowns rather than selling during market stumbles.
The argument
The guest noted that top-performing companies like Amazon, Nvidia, and Netflix have repeatedly lost half or more of their value, but holding them long-term allows the massive winners to dwarf any losses in a portfolio.
The thesis, stress-tested
✓ What validates it
- ✓Company maintains its status as a top dog and first mover in an emergent industry
- ✓The business model continues to innovate and avoid being disrupted by upstarts
▸ Risks discussed
- ▸Difficulty in distinguishing between temporary volatility and permanent structural disruption
- ▸The risk of holding 'dog' stocks that never recover
Hear it yourself
"And back to your earlier question, Barry, you know I can keep holding my Netflix when it loses two thirds of its value when I believe in Netflix, and I see visible proof every day of how important Amazon."
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