It's popular sentiment here that NVDA is overvalued because their revenue has declined. This is not the first time NVDA's revenue has declined. Let's take a look at what happened if a 6 year NVDA investor sold on NVDA revenue first declines, then bought in when it increases.
| Date of transaction (day after ER) | Closing Price | Difference |
|---|---|---|
| Buy on August 12, 2016 | $15.76 | |
| Sell on May 10, 2017 | $30.32 | $14.56 profit |
| Buy on August 11, 2017 | $38.99 | |
| Sell on August 17, 2018 | $61.20 | $22.21 profit |
| Buy on November 16, 2018 | $50.59 | |
| Sell on February 15, 2019 | $38.63 | $11.96 loss |
| Buy on May 17, 2019 | $39.13 | |
| Sell on May 22, 2020 | $90.26 | $51.13 profit |
| Buy on August 20, 2020 | $121.41 | |
| Sell on August 25, 2022 | $179.15 | $57.54 profit |
Total Profit = $133.48 (hopefully not in taxable account)
Price today = $160.40
Total Profit for buy and hold = $144.64 (unrealized profits)
Conclusion: Buy and hold NVDA investor has outperformed the NVDA timer, who buys only after revenue goes up, and sells when revenue drops, buying back in when revenue goes up again.
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