The Intrinsic Value Podcast - The Investor’s Podcast Network cover image

MI279: The Joys of Compounding w/ Gautam Baid

The Intrinsic Value Podcast - The Investor’s Podcast Network

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The Importance of Price in Stock Picks

The NFT 50 was a group of premier blue chip growth stocks, including IBM, Polarite, Kodak and Coca-Cola. At that point in time, no investor hesitated to pay 70, 80 or even 100 times earnings for these stocks. Most of these road stocks crashed 70 to 80% from the peaks by the end of 1972. Eventually, all fast growers turn into stalwarts or slow growers. This painful transition can lead to a long phase of valuation derating which causes this stock to trade flat or sideways for long periods of time.

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