Analyze the financial market like a time machine. The market is the only place where a ‘time machine’ actually exists.
Follow the example! If you buy Meta (FB) shares today at $217.00, it’s like stepping into the ‘time machine’ and going back January 9, 2020 (before the pandemic) when it was the SAME price.
In other words, you managed to go back in time to 2 years ago and buy discounted, already knowing the future of Meta. Maybe you weren’t on the market in January 2020, but you managed to go back in time and buy at the value of that time.
The most important detail of this concept that nobody thinks about or does: FB today is Meta, with MetaVerso, with the absolute expansion of Instagram and WhatsApp entering the payments market. You got a billionaire increase in your profits, much higher than in 2020. So, you went back in time, bought the shares of FB because you know the future of the company and how it kept its development.
The bias of the vast majority of individuals who operate in the markets is exactly the opposite! They enter the same time machine in order to predict the future. They buy expensive assets because they “will be” the future, even with no idea how sensitive they will be, just because everyone says: This is the future! Buy it before it gets expensive!
The collective action entering the ‘machine of the future’ causes the prices of those assets to rise absurdly, carrying a significant financial flow with it. Twitter (TWTR) on 02/15/2022, for example, is costing the SAME price (~$36.00) as of March 9, 2018. From there to here, the company has evolved absurdly in terms of equity, users, technology and profitability; but nobody is interested in getting into the ‘time machine’ of the market and buying Twitter at 2018 prices.
Everyone tries to predict the future to profit, but the future has already arrived for several companies and they are at the prices of 3 years ago. Can you capture this concept? Imagine you, today, already knowing that in 2020 we had a pandemic and blew up the entire planet. Now you know which companies have appreciated and distinguished themselves in their respective sectors. Why not buy them with the values regressed in time?
The market offers you the opportunity to enter the long-awaited ‘time machine‘ and go back years to buy these companies as bargains, however, the absolute majority of the market continues to enter the machine and buy the “future”, which does not yet exist, at an exorbitant price.