One of our users raised a point, whether Jitta is too slow for finding Growth Stocks or not. This is a very good question, so we decided to address it in this article.
Let’s go back to the teachings of our dear father of value investment… Buffet stated that there is no need to separate the quality stocks from the growth stocks, because ultimately, growth is a part of quality.
Jitta itself is a took that helps summarize quality and valuations of every stock for you. Once you are interested in a particular stock, you can Follow it until the time you decide to invest in it.
Jitta can, of course, help you find Growth Stocks (because the Jitta Score also includes Growth into its criteria, in addition, Growth Opportunity also included in the Jitta Factor as well)
Most importantly, Jitta helps you to easily find Growth stocks with Quality (long-term continuous growth). What you need to do is wait for an incident that will make these Growth stocks’ prices fall (while their fundamentals don’t change), and then you can grab these opportunities to invest (according to the principles of investing in great businesses at reasonable prices).
The reason that many people think that Jitta is too slow to find Growth Stocks is because we entered into the market when the stock prices have risen, and the stock prices of good companies have rose too high, so looking at this in the short-run, it might make you feel as though you can never buy these stocks.
If our investment vision is long enough, we will understand that we just have to wait for the right time to purchase that great stock that we’ve been following. Surely, some day, something will happen to cause the price to drop. We need only wait.
Consider the year 1987 when Warren Buffet bought Coca-Cola’s stock, KO. At that time, Coca-Cola was growing 33% per year with an ROE of 33% continuously for many years. The stock price was too high until 1987, where the stock market crisis caused KO’s price to drop to a ‘reasonable’ price (and people were still drinking Coke, in fact, the company was continuing to expand overseas). So Buffet bought KO at that moment (but I think he’s had his eye on this company for many years before he made his move).
Let’s imagine now that if we were in the years 2009 to 2011, and we had Jitta at that time… we would be able to find many Growth stocks and invest in them, such as HMPRO, JUBILE, etc (which had over 20% growth per year at prices that didn’t exceed the Jitta Line). These stocks have continued to grow until today, but now their prices have of course, risen too high. So always remember, crises happen from time to time, and we just have to wait for these moments to scoop up the great stocks.
There are always errors in the stock market. Look at SCBLIF, which is considered to be a growth stock that has a profit growth of over 30% per year. We have had many opportunities to invest in this stock, since 2009, 2011, 2012, and 2013, if it wasn’t got the fact that SCB was going to Tender SCBLIF. The price in 2014 was still suitable for investing in SCBLIF actually, and one would definitely receive great returns.
If we look at enough stocks from around the world, we will see opportunities to invest in Growth stocks. For example, YNDX, which grows around 20% per year and has always had a price above the Jitta Line. Presently, YNDX got affected by the political situation in Russia, causing the price to drop near the Jitta Line. If you think YNDX is a good company, and assess that it’s business didn’t actually get affected much, this might be the chance to purchase a growth stock.
On that end, my advice is to always have a long-term approach to investment, and know that the stock market always presents us with good opportunities. Keep investing, keep finding good companies and follow-up on them. One day, we will surely have to chance to own these companies.