Here are some incredible stats:
Over the past decade, 52% of the S&P 500 companies had a drawdown of more than 50%.
At one point, Apple was down 83%, Netflix was down 73%, and Amazon was down 90%.
Just in the last 5 years, 4 out of 7 Magnificent-7 stocks had more than 50% drawdown.
All great companies stumble. Investing in these companies during their inevitable drawdowns can provide incredible returns during their subsequent rebound. At the same time, not all drawdowns are equal — most deserve the low prices that come after the hype train dies down. At Rebound Capital, we do deep research to separate the wheat from the chaff.
For each company, we dig into:
Are the fundamental issues with the company cyclical or secular?
Is the unit economics profitable?
How significant is the capital investment risk?
How strong are the company’s financials?
Is the management clear about the challenges?
Deep research provides our readers with the conviction necessary to hold for the long term and realize outsized gains.
The best opportunities exist in uncertain times.