Trustnet Magazine 85 June 2022 | Page 34

Performance of Nike stock ( price only ) over 5yrs
YOUR PORTFOLIO Buying back in it was too expensive . Even though valuation doesn ’ t drive what we do , it seemed to be priced to perfection .” However , a year later , the price was higher . Coombs realised he ’ d got his analysis wrong and bought back in . “ It wasn ’ t an easy decision to make , but we realised we ’ d underappreciated the shift in the business model and its growth trajectory . Nike was moving away from third-party distribution and developing a direct-to-consumer online business with a cutting-edge digital marketing platform . We got flummoxed by the valuation and we initially missed the importance of the transition .” Valuing disruptive businesses is difficult . Another reason to sell is a systemic problem in the business . Smeaton says : “ This might be a company losing the power of its brand , or seeing new entrants into its market or some other impairment of its longerterm competitive advantage . Netflix ,

Performance of Nike stock ( price only ) over 5yrs

$ 200
$ 150
$ 100
$ 50
2018
2019
2020
2021
2022
Source : Google Finance
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