Amazon Just Completed its 23 Years of listing, undoubtedly one of the best wealth creation stock by the most popular company, used by millions of population has created 1000 Times returns, and that too in a country like USA.
After reading this I am sure you would be gazing, wish I would have invested in this stock and would have turned my few dollars into millions, sure this is good in dreams, but would it be possible if you were the lucky early investor in amazon?
Most Probable answer is NO, there are certain reasons for it and the main is volatility:
1. The stock fell 15% over three days 107 times.
2. It has lost 6% in a single day 199 times
3. It fell 95% from December 1999 to October 2001. (It took 10 years for amazon to come back to its All-time High which was made in 2000)
In Investing “Magic is not when you buy or when you sell, the magic is in PIVOT”
RoMe.
Now looking at this data, ask yourself the following questions:
- Would you be able to handle this type of volatility in the stock?
- Would you be able to hold the idea about the company is great but seeing the volatility in price?
- If you would have Exited the stock, but still have the guts to buy when it was reversing up in Price, Profits or People?
As it is not easy to build a company like amazon, the same its not easy to hold on shares which creates immense wealth but suffers volatility, because of nature of business!
In India we have certain 1000 times wealth creator stocks like:
- Infosys, Relaxo Footwear, Balkrishna Industry, Bajaj Finance, etc (not an investment advise)
So the whole point is investing is not easy, its not linear, it is going to be a rough journey, if you have a process, you have a probability to create wealth or else you need to depend on the luck factor!
Let us assume from 100 IPO Investors, how many would have holding amazon till today, do reply in the comment section!
Happy Investing!
RoMe!
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