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Let's take a look at Netflix (Ticker: NFLX).
Remember the times when everyone was scared of Netflix? Actually, there is still a big crowd out there that talks about Netflix doomsday. This past week, Netflix surpassed Disney in market cap, at least for a few hours. You could have sold Netflix when it was less than $100. You could have sold it when Disney announced it is going to introduce its own streaming services. You can still read the news that Netflix is an overpriced bubble ready to burst.
But, the reality is that Netflix is a very well-managed company in a rapidly growing market. Even the high amount of debt it carries is a well-thought driver of growth. It's not just the cash the company used to buy back its shares (unlike many others), and it is not the money it poured into real-estate. It's money the company has promised to the provider of its content in the future. And, the company has proved that more content means higher engagement. As far as Netflix goes, the ups and downs in the stock price are expected, but you can ignore the media and let this well-managed company do its thing.
We all do it. Not just for Netflix, but for every well-managed company that grows. Deep in the dark corners of our investing mind, we are all most likely articulating the reasons to sell our best-performing shares. Don't believe me?
Here are two more examples:
Apple-haters are many and everywhere...
It's not a technology-leader anymore... It's just a phone company... How can it continue to grow and sell a $1000-phone?
You could have sold Apple on any of such news headlines. But then Apple sells more Apple Watch than any other wearable device-maker. A well-managed company in a growing a market doesn't become a loser on the doomsday news.
Are you convinced yet? Maybe, one more example:
Who pays for overpriced coffee? Starbucks' share price is just stuck and doesn't move...
But then Starbucks establishes a global partnership with Nestle to distribute its products globally. And, it comes out that Starbucks is the number one mobile payment provider in the U.S.
The takeaway for us, the intelligent investors, is that counterintuitively, the hardest part of investing is not which company to invest in, but to have the discipline of not getting swayed by the market noise.
Stay away from the news! Stay smart!