I recently wrote about share prices ‘consolidating’ on my blog.
“Quite often a share price runs ahead of the company’s performance and then stagnates as the company catches up. Trouble is you never know when the consolidation period will start and when it will end. Investing for ten years undoubtedly involves watching prices tread water for long periods.”
As well as FW Thorpe, another of my shares, Bioventix, seems to be in a consolidation phase. Its price is presently at a level first seen two years ago:
A few other ‘quality’ names are in the same boat. Hargreaves Lansdown is almost back to a level first seen five years ago:
James Halstead is also almost back to a level seen five years ago:
Fever-Tree is at a level seen four years ago:
Craneware is at a level seen three years ago:
And Boohoo is almost back to a level seen four years ago:
True, the pandemic will have affected these businesses to some degree (positively and negatively). But I suspect the sideways movements of these shares are not what holders have become accustomed to after some superb gains in the preceding years.
I plan to keep holding Bioventix, but wonder what the views are from anyone else holding the shares above. Happy to hold on and be patient? Frustrated watching other shares moving higher while yours go sideways? About to sell and reinvest into something that has more immediate upside?
The share prices may even reflect that possibility that the best days of these companies have been and gone. Not much worse in the market than holding onto a highly-rated quality name that loses its quality and premium rating.