There are quite a number of long term holders of micro cap stocks that aspire to be millionaires or
Multi millionaires by simply holding the stock to reach their million dollar target.
So if a holder had bought and invested say $50k into a small cap stock by buying 167k shares at 30c and with good fortune saw its stock rose into a ten bagger giving worth of $500k, that is just half way its journey to $1m. So hold longer as it is assumed Better for Longer with exuberance running high. So even the stock subsequently fell substantially below that ten bagger price, they unflinchingly stood the course because in the long term their millionaire dollar dream would be met and they could retire early.
I think we saw that story countless number of times with darling stocks that minted millionaires. And it is a great aspiration. But if only stocks could behave in such manner to deliver to plan, if it was so easy. And there have been many stories too about the million or close to a million they made that they lost it all by keeping the faith, even when it has become unfounded. Reminds of the case of the accountant who refused to sell his BIG stock in the midst of those allegations (which proven true subsequently) for $1 capital gain because he wanted to wait a little longer to get his 50pc CGT discount. We make certain decisions to suit our own circumstances AS IF the market or the stock will wait for us.
In the former example, a $500k gain not taken due to an objective to make a million could end up with gains dwindling to just $100k and possibly lower.
You don’t gain if you don’t realise/sell.
You think the stock price would return to its former glory just by holding- most people believe so , but one would have to understand what drove those high stock prices in the first place , for most micro caps the valuations they rose to at the height of exuberance bear no resemblance to eventual reality or score - take Afterpay as an example.
