Looking back at stocks that crushed the market can be depressing when you don’t own these winners. For example, among the top 20 stocks from the beginning of 2010 to the end of 2019 are NVIDIA, Netflix, and MarketAxess Holdings. Over that decade, these stocks returned over 2,700%, 6,700%, and 4,000% respectively. Sadly, I’ve never owned any of them.
But what if you could turn missed opportunities into actionable insight for the future? I believe you can. As Mark Twain is supposed to have said, “History does not repeat itself, but it often rhymes.” In that line of thought, NVIDIA, Netflix, and MarketAxess share at least two traits that we can measure and look for in other companies. Consider that these three companies are:
These two traits don’t guarantee a stock will be a future winner. But if a company exhibits these characteristics, we know it has some of the same ingredients used in winning recipes, making it at least worthy of more research.