Moritz (@leveragegrinding) on getquin

/ Just because Coke tastes good doesn't mean you have to buy the stock

My professor explained something interesting yesterday, I have to briefly record his words and make sense of them.

𝙄 ) 𝘽𝙚𝙞𝙨𝙥𝙞𝙚𝙡𝙚𝙡𝙚 for beginner purchases

𝙄𝙄 ) 𝙒𝙖𝙨 𝙨𝙤𝙡𝙡𝙩𝙚 𝙢𝙖𝙣 𝙨𝙩𝙖𝙩𝙩𝙙𝙚𝙨𝙨𝙚𝙣 𝙈𝙄𝙉𝘿𝙀𝙎𝙏𝙀𝙉𝙎 𝙩𝙪𝙣

𝙄𝙄𝙄𝙄) 𝙕𝙞𝙩𝙖𝙩 𝙢𝙚𝙞𝙣𝙚𝙨 𝙋𝙧𝙤𝙛𝙨 (Chair of Strategic Management)

tldr: Skippt to III)

𝗜) 𝗕𝗲𝗶𝘀𝗽𝗶𝗲𝗹𝗲𝗲

"𝘐𝘤𝘩 𝘣𝘪𝘯 𝘷𝘰𝘯 𝘊𝘰𝘭𝘢 convinced 𝘶𝘯𝘥 𝘬𝘰𝘯𝘴𝘶𝘮𝘪𝘦𝘳𝘦 𝘴𝘦𝘪𝘵 𝘑𝘢𝘩𝘳𝘦𝘯 𝘢𝘶𝘤𝘩 regularly 𝘜𝘯𝘮𝘦𝘯𝘨𝘦𝘯 𝘥𝘦𝘳𝘦𝘳 𝘗𝘳𝘰𝘥𝘶𝘬𝘵𝘦, 𝘥𝘦𝘴𝘸𝘦𝘨𝘦𝘯 𝘩𝘢𝘣𝘦 𝘪𝘤𝘩 𝘮𝘪𝘤𝘩 𝘫𝘦𝘵𝘻𝘵 𝘦𝘯𝘥𝘭𝘪𝘤𝘩 𝘥𝘢𝘻𝘶 𝘦𝘯𝘵𝘴𝘤𝘩𝘭𝘰𝘴𝘴𝘦𝘯 𝘮𝘪𝘳 𝘥𝘪𝘦 𝘈𝘬𝘵𝘪𝘦 𝘪𝘯𝘴 𝘋𝘦𝘱𝘰𝘵 𝘻𝘶 𝘭𝘦𝘨𝘦𝘯 😊"

"𝘐𝘤𝘩 𝘧𝘢𝘩𝘳𝘦 𝘴𝘦𝘪𝘵 3 𝘑𝘢𝘩𝘳𝘦𝘯 𝘛𝘦𝘴𝘭𝘢 𝘶𝘯𝘥 𝘨𝘭𝘢𝘶𝘣𝘦 𝘴𝘦𝘩𝘳 𝘢𝘯 𝘥𝘢𝘴 𝘒𝘰𝘯𝘻𝘦𝘱𝘵 𝘥𝘦𝘳 𝘍𝘪𝘳𝘮𝘢, 𝘥𝘦𝘴𝘸𝘦𝘨𝘦𝘯 𝘩𝘢𝘣𝘦 𝘪𝘤𝘩 𝘮𝘪𝘳 𝘦𝘪𝘯𝘦 𝘦𝘳𝘴𝘵𝘦 𝘗𝘰𝘴𝘪𝘵𝘪𝘰𝘯 𝘢𝘶𝘧𝘨𝘦𝘣𝘢𝘶𝘵."

A year ago, the WAZ even wrote:

"𝘍𝘈𝘈𝘕𝘎, 𝘥𝘪𝘦 𝘈𝘬𝘵𝘪𝘦𝘯 𝘥𝘦𝘳 𝘡𝘶𝘬𝘶𝘯𝘧𝘵". Dead sure thing, what could happen with Facebook, Amazon, Netflix etc.?

Information leading to purchasing decisions

(based on statistical bullshit, see https://app.getquin.com/activity/GDlzIDdeHe ) is apparently not only available on Instagram, where you can unfortunately often read "buy stocks you know first".

(NO, if you have no idea and no interest in learning, buying ANYTHING is more likely to lead to high losses, diversified funds or ETFs make more sense in the long term in this case)

The average investor does not manage to beat the market. So if you buy shares, you want to outperform the market.

If you don't even have the patience for valuation and market analysis, you are underestimating the average market participant and would therefore be better off investing in funds or world ETFs.

To come back to the WAZ example: Yes, FAANG are and were "good" companies.

From a custumer point of view.

BUT

𝗘𝗦 𝗜𝗦𝗧 𝗔𝗟𝗟𝗘𝗦 𝗘𝗜𝗡𝗚𝗘𝗣𝗥𝗘𝗜𝗦𝗧

! Everything that has happened, has been produced, has been achieved in the present, obvious future and past has already been estimated by institutional providers and thus priced into the price!

All investment theories such as those in the examples above are therefore invalid.

Something like "Amazon has a good market position" is also a pseudo-argument. Even those who can significantly influence the Amazon share price know this.

𝗜𝗜) How do I know if it is not only a cool company, but also a 𝘀𝗶𝗻𝗻𝘃𝗼𝗹𝗹𝗲𝘀 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁?

[Well, actually everything is priced in, we don't have more information than others and therefore everything is overestimation and rationally you are forced to invest passively, BUT...]

There was a good post on valuation here recently by @TheAccountant89
https://app.getquin.com/activity/laOUVhfFDI?lang=de&utm_source=sharing

Otherwise you could at least consider the following:

Macro developmentforecast FED, ECB and difference to the priced-in

Long-term chart outlook

Upcoming Annual General Meetings etc.

(In this sense @sharkace how far along are you with the projections?)

𝗜𝗜𝗜𝗜) 𝗭𝗶𝘁𝗮𝘁 𝗺𝗲𝗶𝗻𝗲𝘀 𝗣𝗿𝗼𝗳𝘀

"As an investor, you have to keep reminding yourself of one thing. A share value is a number that reflects an entire company. It's not something as easy to understand as profit, turnover or loss, which we can simply explain to ourselves logically; many more things have an influence on this figure that many people don't even know!

So if you think you can play in this game, don't think you will be recognized, don't even think you will be noticed! You are not a player, you are the game! And then you're such a small part of the game that none of the players are interested in your existence."

#learn
#learninvesting
#stockanalysis

https://www.commerzbank.de/portal/de/ratgeber/finanzen/aktienbewertung-so-gehen-sie-vor.html

CoinEsel@DonkeyInvestor

2Yr

@ccf - thanks, this blind 'buy shares of companies whose products you use' really gets on my nerves

•

View all 13 further answers

tim1@tim1

@ccf
I've also fallen into this thought from time to time. But in retrospect, it's complete nonsense. And since I don't have that much time for stock research, I have a large part in ETFs. The time I save, I can use to earn more money.

View all 7 further answers

Inflationslumpi@Inflationslumpi

You're absolutely right! In the retirement home I always booze Heineken beer, but the share comes me not in the depot😊

Jonas 🕊️@TheAccountant89

@ccf

Stewie G.@Stewie

See important post, especially for newbies but also people who have been around longer. I think this is a big fundamental mistake that many investors make. @ccf

Danny@Dannys

Especially in the U.S., the market is very efficient, and the chisel is priced in. But only the most (not quite 100%). In Europe, the market is somewhat less efficient, but also very efficient, but if you look at the EM, you see a relatively inefficient market. A lot of things are not priced in. For this reason, there are also many active funds in these regions that still beat the broad market.

Lucrash@KapriolenCapital

I wouldn't say everything is priced in, but rather most of it. There is already here and there an edge but as @ShovelStocks already says not with the well-known names. Also with China values that annoys me here. Yes, it is so undervalued and why do not risk-averse hedge funds go in on mass? Also, the pricing never runs efficiently because exaggerations to the top or bottom are not uncommon. It is really a very difficult topic. Gudda contribution Mr. Helm @ccf

Der Boss@Bosshaft

Ultimately, it doesn't matter whether you like a company or not. It's about the profit you make

Daniel Düsentrieb@Hillbilly887

Buying shares whose brands you know and like has two advantages in my opinion: 1. as a newcomer to the stock market, you usually have little relation to how the capital market works. Especially with generally popular shares, there is often news that moves the price (Tesla, Microsoft, bmw, etc...) for example, I had put a few Lufthansa shares (strong cyclical) in my portfolio as my first share in 2017. So I was able to gain experience of how strongly the capital market can react to news (eurowings and Niki news at the time). 2. the marketing aspect or the popularity of a brand certainly also has no insignificant influence on the price performance of a share. For example, one notices that Apple is ingenious in creating a lock in effect and thus drawing more customers into its own universe (who then often stay). If this development can be continued in the future, this also has a positive feedback on the future share price development. Overall, however, key figures and factual analyses are probably a more reliable indicator than mere brand enthusiasm. In my opinion, however, it can make sense, especially if you still have little experience, to get to know how the stock market works.

View all 2 further answers

Adrian@Nati9n

I think the idea is actually quite good but... you assume in your examples that it was the end of the line in each case. So yes, basically a certain future growth is priced in, but that doesn't mean that the company can't grow even stronger or longer.

Show answer