...Buy and Hodlers who bought NIKE in 2008 and continued to remain holders till today will still say they are still very much up as they had bought cheap, the stock served them so well over the past years that there is no reason to ditch it (which is being ungrateful, not loyal)....why is the reference point your entry price? If you made 600% up to prior to the fall, you should not be happy if you are now 300% up and still looking dicey.
....my point is Buy and Hodlers do not contemplate selling when valuation is overstretched, over the top and not commensurate with prevailing macro fundamentals. Because the stock has been so good to them over the past years of holding. The stock is not your employer (even then these days loyalty is considered over rated) or your kid or your dog. Stocks go up and stocks go down, but in the long run they go up- that's common thinking. But only if they can continue to grow which holders will want to believe because it did in the past. Many growth stocks become legacy stocks because of many factors, brand destruction, change in technology, change in consumer preference, amongst others, invariably they fall/decline as time progresses.
..take AGL as example, if you held since 2008, you'd still be unable to recover your invested capital. AGL is a good company, an established brand. And up to 2006, no one would argue that this stock would not continue to grow as it did in the past. The stock grew 512% from 1993 to 2006 over a 13 year period (average 39% gain per annum), fast forward from then (2006) to today, it had collapsed -49.5% over 17.5 years!
...that is what Buy and Hold can look like looking in the rear mirror years from now, when you can't see it today when we are at 2006 with AGL. Of course, what happens to Nike and AGL is not going to be the case for growth stocks in general, yet just imagining that they are great companies with great products do not preclude them from such a scenario of stagnation and decline after earlier years of significant growth.
I should have zoomed out. Nike $NKE has ended a 25 year upcycle. Ironically this is when the whole globalization growth cycle began. Does this suggest the benefits of globalization ended in 2022 and we're now in for 40 years of rising interest rates?
