2 Stocks That Turned $1,000 into $500,000
One of the trickiest aspects of investing is knowing which companies to hold for the very long term. The ones that can generate the most wealth for us are the businesses that go from good to great, and from great to outstanding.
However, holding on to weak businesses over the long term not only prevents compounding, but it also represents an opportunity cost for the investor, as the money could have been deployed more efficiently elsewhere.
Investors who seek growth should look for companies with durable competitive moats, strong products and/or services, and management with the capability to deploy capital to generate high returns for investors. Granted, not many stocks fit this bill, because high growth has a tendency to lead to cash burnout for many companies if not managed properly. An organization that grows significantly larger over the years may also lose its focus and go astray, resulting in capital destruction rather than growth.
Source Fool.com
