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Love is Not the Basis for Long Term Wealth Creation


According to Jim Cramer, there is now a new metric for valuing a company based on how many people love it. Too bad there is no long term evidence for that statement. Many of the most hated companies have built fortunes (e.g Walmart, Phillip Morris, Exxon Mobil) while many once loved companies end up in decline or worse. Love is fickle. It is not the basis for long term wealth creation. What were the most loved companies of 10 years ago? Cisco, JDS Uniphase, Yahoo, AOL, and Intel, to name a few. All of them were terrible investments back then. For everyone who believes Facebook will be worth $1 trillion in a few years, or Apple will be worth $3 trillion, something to consider.