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[ Fri, Feb 21st 2025 ]: MSN
What's Going on With Uber Stock?

Explained: What are 'high-conviction stocks' and why investors should track them

High conviction stocks are those in which fund managers or investors have a strong belief in the company's future performance, often due to robust fundamentals, unique business models, or significant growth potential. These stocks are typically held for the long term, with investors willing to endure short-term volatility for the promise of substantial long-term gains. According to the article, high conviction stocks are not just about picking winners but also about understanding the market dynamics, the company's competitive edge, and its management's vision. Investors track these stocks because they can offer outsized returns compared to the broader market, especially when the market sentiment is positive. However, they also come with higher risk due to their concentrated nature, requiring investors to have a deep understanding of the business and market conditions. The article emphasizes the importance of due diligence, as these stocks might not always perform as expected, and their high conviction status can sometimes be influenced by market trends or speculative bubbles.

Read the Full MSN Article at:
[ https://www.msn.com/en-in/money/other/explained-what-are-high-conviction-stocks-and-why-investors-should-track-them/ar-AA1zuTVq ]