One thing mentioned by Peter Thiel in his book Zero to One is that wall street fundamentally undervalues long term vision. I want to research this idea more because I believe it has merit. Thiel gave a few examples, such as Amazon, that I discounted at first because I thought the market was just discounting the company on a risk basis. What really validated the idea to me was thinking back to when my Mom, who understands tech, kept talking about buying Microsoft in 2015. She would tell me that Nadella has the right, focused long-term vision for Microsoft. Since then, Microsoft’s value has grown immensely. As an investor who’s quantitate analysis is limited, deeply understanding the long-term vision of a company may be a way to get an edge in the market.
One factor that may support this idea is that many institutional investors have narrow time frames so an investment will not realize its long-term vision during their holding period. As an investor looking to grow my portfolio over decades, I can leverage my time arbitrage to focus on the long-term vision of a company and hold an investment long enough to reap the fruits of such a vision.
