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Aritzia Inc. Subordinate Voting Shares (ATZ)
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Brookfield Corporation Class A Limited Voting Shares (BN)
Q: Good morning, At times you guys talk about a good company that has a long runway in the future but for now the investor will have to be patient. Wouldn't it make more sense to sell these stocks for the time being and invest in something that should have more short term potential? Typical of an Opportunity cost. A couple examples would be Aritzia and Brookfield, BN
5i Research Answer:
Theoretically, it makes sense to move money to something else in the meantime while waiting for the fundamentals to recover, as money has opportunity cost. But in practice, it is almost impossible to time the market, either getting in at the bottom or getting out at the top. The market is efficient in that if the business starts to recover, most of the time the price recovers very quickly. A lot of potential profits have been lost while sitting on the sidelines and waiting to get back in. As a result, we think the best course of action is to stay invested, if investors truly believe in a company’s fundamentals.