Cult stocks – is there a point to trying to find and buy them as the cults are forming?

As something of a thought experiment, I was trying to come up with a bunch of stocks with significant cult followings. Some of these followings are larger and more fanatical than others, but all are significant given the sizes of each company. As for what counts as a “cult following,” I'm thinking about cases where a substantial portion of the shareholder base is extremely confident in management, regardless of price action; is enthusiastic about owning and talking about the stock; and has a “buy and never sell” mentality. Here's what I have:

  • Berkshire Hathaway (BRK.A/BRK.B)

  • Apple (AAPL)

  • Disney (DIS)

  • Tesla (TSLA)

  • Brookfield Asset Management (BAM)

  • Texas Pacific Land (TPL)

  • Nokia (NOK)

If any of you have more to add, feel free to mention them. I don't think that most of last year's “meme stocks” qualify because of how short-lived the mania was, but consider them if you like.

Most of these have a few things in common. 5/7 have a visionary founder and/or CEO, dead or alive, who was/has been at the helm for a long time and become something of an icon to shareholders. 6/7 have significantly outperformed in absolute terms over long timespans. 5/7 are unusually complex businesses with a lot of moving parts, but with unifying “stories” that rope all of their constituent pieces into a cohesive whole in the mind of the shareholder (i.e. Buffett's security selection on top of cheap leverage driving Berkshire Hathaway's long-term performance).

Are aspects of the businesses that create cult followings also conducive to long-term performance? Does complexity lend itself to mispricing, and therefore opportunity? Is it possible to identify these businesses as the cult following develops and before a long-term record is in place, and is there a point to trying?

I am long BRK.B, AAPL, DIS, BAM, and NOK.


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