..you see so many of such ASX stock charts that reflect a period of outperformance followed by an extended period of underperformance
...from Feb 2009 to Dec 2017, Challenger Financials (CGF) experienced a 1194% stock return, cementing it as one of the more reliable quiet achiever (in annuity business).
...but since Dec 2017, its stock price has declined by -55% over almost 7 years, moving mainly sideways.
Apollo sell-down wipes $530m from Challenger Lucas BairdReporter
Sep 5, 2024 – 1.00pm
Concerns over the future of Challenger’s relationship with Wall Street asset manager Apollo are behind a sharemarket rout that wiped more than $530 million from the Australian financial services company’s value, analysts say.
...I'm afraid to say that it seems to be endemic that we have this share experience of 'unbridled optimism followed by unenthusiastic growth period'
...and on that basis, one should not trust stocks that have had a big run to continue with that run, ONCE the momentum has faltered. When momentum has faltered, there is no reason to hold much longer despite positive long run prospects. Because its valuation may have already front-run at that stage and could no longer be supported by forward fundamentals.
....all these rallies DO NOT LAST,...at some point they die of Exhaustion, and when they start making lower lows, we can conclude that the multi year stock bull rally has ended, and they could start looking like CGR or RHC or at worse APX.
In other words, it does not pay to hold on to dear life when the favourite darling stock starts to tank - the multibags you have made could whittle to nothing (e.g APX, CHN, PPX many more, some go into administration).
Like your stock because it gets you riches, but don't fall BLINDLY in love with it. And yes, when the stock has given you riches, your view is completely biased and likely that you would stay in Denial.
LS — TradingView
