If we found one of the best opportunities in our lifetime to invest into a very high quality company with exceptional management, we'd hope to own that company forever. We may not own every business forever, or any business forever, because industry conditions and management teams change, but having a target of forever creates a highly disciplined approach that focuses heavily on qualitative factors.
One extreme example of the disconnect between momentum and the long-term story is Netflix (NFLX). In 2011 Netflix announced it was separating the DVD mailing business and the streaming business. There was widespread backlash over the higher combined subscriber fees. The stock went from $38 in mid-2011 to $9 within months. The momentum was negative and the analysts and media bashed it daily. Netflix reported losing subscribers. The stock was still under $10 a year later. Then, of course, fundamentals prevailed, growth continued, and the stock soared 20-fold since its low in 2011.
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