Simply put, many investors fear that a significant run-up in a stock price likely means they've already missed out on their best chance to realize sizable gains from that stock and simply move on. Unfortunately, considering a stock's price gains in a vacuum, rather than considering where it can go from here, may be one of the biggest mistakes an investor can make, causing them to miss out on potentially game-changing opportunities.
If you buy stakes in strong companies with sustainable competitive advantages and give those positions some time to grow, even relatively modest investments can turn into much larger sums. For Amazon (NASDAQ: AMZN), the answer was with a pioneering push into the world of cloud services that ultimately paved way for much of the modern internet as we know it. From there, the company has used its development strengths and vast resources to build a fast-growing digital advertising business.
Shares of online retail stocks were taking a beating in Friday trading, with Shopify (NYSE: SHOP) stock falling by 5.2% through 2:37 p.m. EDT, MercadoLibre (NASDAQ: MELI) down by 4.5%, and e-commerce leader Amazon.com (NASDAQ: AMZN) off by 2.3%. As it reported Friday morning, analyst Stephen Ju at Swiss mega-bank Credit Suisse cut his price target on Amazon shares by more than 10% to $4,200, based on his estimate that Amazon will earn only $70.98 per share this year and $79.83 per share next year. Credit Suisse's new earnings projections reflect a reduction of 12% this year, and a staggering 33% reduction in expectations for 2022.