Let’s say that at the turn of the century, you had a crystal ball and you knew that the Internet was going to be the thing, and you also could see that Cisco Systems was going to run the whole ball of wax.
Based on your dead-certain knowledge of the future and how everything was going to work out, was CSCO a buy at 80?
Of course you know the answer. Even though you were 100% correct about the real world outcome, if you choose a bad entry point – even though you picked the company that would end up winning everything – you lost 50% over a 17-year period. And that’s after a huge bull market in equities 2009-2017.
The takeaway: entry points matter. Prices matter. If you buy in too high, you’re basically dead, no matter how “right” you happen to be about the long term outcome.