Picking stocks is about predicting the future. As investors can tell you, being early to spot a trend and betting on a company poised to ride it can translate to a handsome return. Those who bought Amazon in 1998, for example, or Tesla in 2012, or Nvidia in 2020 correctly foresaw the respective explosions of online shopping, EVs, and the AI revolution—and made out like bandits.
Of course, this isn’t easy to do. One issue is timing. A thesis about the future of a sector might be correct, but it may still be years away. Betting on the right sector but the wrong horse can also be painful, as investors in bankrupt EV maker Fisker or fallen chip giant Intel can attest.
