March 19, 2016 12:51 am
I have read countless posts where people make projections either on the upside or downside as if there is some reality or rationale in the stock market. The market trades on emotions of greed and fear, the most primitive of our senses. This is the true reality of it.
When people start to pin point price targets as real versus unreal, all they are doing is deluding themselves for what they say is NOT REALITY at all. No one knows how the price is going to reality.
Lets look at the reality of two stocks. Amazon trades at a multiple of 500 times earnings, Apple trades at a multiple of 9 times. Now what does reality have to do with any of this? We can see that the investors in Amazon form a sort of cult and have a hold and never sell mentality. Those on Apple are short term oriented investors trading back and forth for profit hence no premium for growth.
Now I return back to Convalo. Is 50 cents the proper real value? Is it $ 1 as some others say? or is it $ 6 as some alluded to? Or even farther at $ 16? No one knows. All of these points or prices could become real. It depends on the emotions of the investors. If investors believe that Convalo will control the substance and abuse market then $ 100 would even make sense. Once more, it is not reality that counts but the perception of reality, which is what we create as reality.
When the overall mentality is that of investors that Convalo is a buy and hold story for the next 5 to 10 years then we will get Amazon type of valuations. At the end, the real value is created by investors on the day they trade it, just for that day. The next day may be a different reality lived through the eyes of other investors.
Lets just enjoy the ride and see Convalo succeed. If them manage to increase capacity of beds with robust growth over the next few years the investors will have a perception of invincibility which leads to greed which leads to much higher prices.
For myself, I think I will hold for at least 3 years minium to 5 years, maybe 10 years if growth is robust. The ironic thing is that once we have all that money but we may not have sufficient life remaining. So in the end, what is reality? It is an illusion, everything is temporary, everything changes and everything with time disappears. So reality is that what we have is nothing.
Enjoy your life and show love to those whom you care about, at least you know that it will have a remaining effect in their souls.
jmho