When people say something is priced in, they are primarily referring to the short and medium-term future. Just as the stock market is a few years ahead of the real economy, so are the share prices of individual companies. However, the market can only price in facts that are already known or, in the case of unknowns, price in the expectation in relation to probability and impact. If, for example, you are convinced that Amazon will at some point completely dominate the global retail trade and that the retail trade will almost die out, then this is not yet priced in because things could turn out very differently. Nevertheless, this would be a bet on the fact that the sizes are getting bigger and bigger, which can pay off.
If I buy Microsoft, for example, because I see a big growth market in gaming and assume that Microsoft will completely dominate it in 10-20 years with subscription models that everyone uses, there is a risk that I am wrong, but with a well-diversified portfolio you can still beat the market with this tactic. You have to get to grips with the companies and not blindly buy what you know, but you can still beat the market with big tech, even though their enormous growth potential is already priced in by the market.
If I buy Microsoft, for example, because I see a big growth market in gaming and assume that Microsoft will completely dominate it in 10-20 years with subscription models that everyone uses, there is a risk that I am wrong, but with a well-diversified portfolio you can still beat the market with this tactic. You have to get to grips with the companies and not blindly buy what you know, but you can still beat the market with big tech, even though their enormous growth potential is already priced in by the market.
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@EnjoyCapitalism Sure, but the claim that Microsoft will dominate in the next 10 years is based on facts that others also have. But sure, I know what you mean ๐
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