The Tortoise Versus The Hare: A Lesson for Investors
The Fable’s Twist
Aesop’s fable “The Tortoise and The Hare” is a lesson often used to emphasize patience. In the story, the hare, known for his speed, mocks the slow tortoise. Eventually, the tortoise challenges the hare to a race. Despite the hare’s massive lead, he becomes arrogant and takes a nap, believing he cannot lose. When he wakes up, the tortoise has passed him and wins the race. This narrative teaches us that “slow and steady wins the race,” but its application stretches far beyond simple morals.
Application to Investing
While the tale suggests that steady progress leads to success, consider what would happen if the race was shorter: the hare would have easily prevailed. This analogy applies directly to investing. For instance, saving for retirement is a gradual journey, similar to the tortoise’s slow but steady pace. This approach builds a secure nest egg over time.
Nonetheless, not all investing strategies need to mimic this slow approach. Certain stocks can yield rapid increases in value, leading to quicker profits that can be tapped into for immediate needs. In an environment where everyone could use a bit more cash, leveraging these shorter-term gains can be beneficial.
The Current State of Inflation
Inflation continues to be a pressing issue as revealed in the latest government report. As of this week, prices rose by 2.6% compared to last year, a slight increase from September’s 2.4%, yet still above the target of 2%. When excluding food and energy, “core” inflation has stabilized at 3.3%. Despite inflation decreasing since its peak at 9% in August 2022, the everyday costs for Americans remain high.
Take food costs as a prime example. According to the USDA Economic Research Service, from 2019 to 2023, the total food Consumer Price Index rose by 25%, which surpasses the 19.2% increase in the overall Consumer Price Index. While food prices grew slower than transportation costs (which surged by 27.1%), they still rose more swiftly than housing and health care expenses.
Choosing the Right Stocks
Investment decisions require careful consideration of the types of stocks in your portfolio. Some investors opt for high-confidence picks that they believe will thrive over the long haul, while others make lower-confidence choices based on current market trends. The goal is to balance these investments, as both types serve distinct purposes in wealth-building.
Reflecting on the fable, the tortoise may have triumphed in the end, but the hare certainly made significant strides rapidly. This philosophy suggests that a diverse portfolio can thrive; incorporating stocks that gain value quickly can potentially increase overall wealth sooner.
Investor Louis Navellier has developed a method to pinpoint stocks likely to see explosive short-term growth. His strategy is detailed in his Accelerated Profits service, emphasizing stocks poised for immediate, significant gains. Navellier relies on rigorous criteria to identify these opportunities, focusing on three essential indicators: a track record of strong earnings, impressive sales growth, and a history of positive earnings surprises—often outperforming expectations by 34% on average.
Following this, he employs quantitative analysis to track which stocks are attracting attention from large institutions. Institutional buying can often lead to substantial increases in stock prices.
Despite what Wall Street has suggested, bigger returns don’t always require taking on greater risks. Navellier’s system accurately targets stocks anticipated to outperform the market while minimizing risks through careful criteria based on volatility and performance metrics.
Thus, stocks that fit these qualifying criteria can experience noteworthy bursts of growth. Navellier asserts that only those stocks that excel in multiple aspects earn the coveted AAA rating, making them prime candidates for his Accelerated Profits buy list.
Before recommending any stock, Navellier personally evaluates them to ensure subscribers receive only the best possibilities for gains, which can fund everyday expenses as they arise.
The overarching lesson? While slow and steady investing plays a vital role in long-term success, exploring opportunities for quick gains can lead to increased cash flow in the short term—each strategy has its place in an effective investment plan.
To learn more about this approach and how to navigate current markets, Louis has recorded a free presentation explaining his system and outlining why now is a prime time for short-term investments.
Enjoy your weekend,
Luis Hernandez
Editor in Chief, InvestorPlace
