...a buyer of $100k CHN shares at 56.5c in March 2020 could have exited at $9.97 in Nov 2021 for a whopping $1,764,602 for a gain of $1.664mil in just 21 months hold for 1,554% return. But he/she did not want to pay CGT and wanted to wait for PRODUCTION (It is Imminent!) and when further announcement revealed adversity and a delay, he/she still did not want to unload. Held to this very day, that $1.764mil became just $189,380 and the $1.664mil capital gain has diminished to just $89k!
Stocks are not Landed Property. There are a lot of things that can go wrong. Typically once they fall hard, they would never re-visit those highs again, because along the way there would have made sizeable CR, and their fundamentals, when viewed with hindsight was probably overhyped and led by extreme expectations.
The reality with these smaller cap stocks is that the highest return i.e from trough to peak can be achieved in shorter period of between 1-2 years, so it is not Better for Longer, and the longer you hold them thereafter typically produced worse return outcomes when they start making lower lows from the peak.
I am showing this illustration to indicate that LT holders do not know when to exit - must their market cap be higher after they start production and generating revenues? That's what most think and expect, but not necessarily the case. It could well be that the market cap the stock has been driven to prior to generating revenues has gone way too ballistic and over the top, that even after making profits, its PE could be already >50x. Tesla's market cap was worth more before it made even more money, because the market front-run its delivery.
