CARE
Carter Bankshares, Inc. Common Stock
stock NASDAQ

The following is an excerpt from [Chapter 9, CARE AND MAINTENANCE OF A LOW P/E PORTFOLIO, John Neff on Investing](https://docs.google.com/document/d/1nu7l3TmCIOqumoiDJ_I2eliGa2W0hFxWGhqaPlEgDvI/edit?usp=sharing)
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**DON’T CHASE HIGHLY RECOGNIZED GROWTH STOCKS**
Stocks of any era’s great growth companies fill the ranks of highly recognized growth stocks. Almost without exception, they remain great growth companies for extended periods of time. Consumers recognize their names: General Electric, Gillette, Coca-Cola, Pfizer, and Procter & Gamble are typical. Their financial performance, particularly their earnings, features outstanding longevity and assuredness. Their businesses are sound and global, and they usually dominate their markets.
Everyone wants to own highly recognized growth stocks. They’re ordinarily quite safe, and they seldom embarrass shareholders. That’s not a very good case for buying them at all times, as is starkly illustrated by the tale of the so-called Nifty Fifty. They were the market’s most celebrated class of highly recognized growth stocks. Week after week, in 1971, 1972, and 1973, these stocks had a hypnotic hold on investors.
Sell-side research firms pitched them as "one-decision" stocks, meaning buy them and hold them forever. Behind this strategy lay the coupling of unlimited earnings growth with a limited supply of stock. Thus, investors widely believed that prices would go up forever. Shareholders counted on ever-escalating dividends and ever-escalating stock prices. But what this scenario really required was an unending supply of new investors who were more gullible than their predecessors.
I watched in amazement as investors clamored for Nifty Fifty stocks at the expense of dozens, if not hundreds, of sturdy growth stocks of lesser renown. As a student of market fancies, I expected this kind of phenomenon to surface from time to time. This fad's tenacity surprised me. While a handful of price-earnings ratios raced skyward, our low p/e goods languished. I never expected low p/e stocks to get respect in an adrenaline market, but this was ridiculous. Windsor posted a 25 percent loss in 1973.
**NIGHTS ARE DARKEST JUST BEFORE DAWN**
Those were bleak days. My report to shareholders in November 1973 reflected the dismal course of events and, even more forcefully, my resilient faith in Windsor's low p/e strategy:
... \[We\] view the current devastation in the marketplace, not as a reason for alarm, but rather as one of opportunity. We believe we will look back on this recent period of excessively low evaluations of innovative, accomplishing companies as one not unlike the early 1950s, when stocks of good companies also could be acquired at prices of only four or five times earnings—prices that provided the opportunity for truly remarkable appreciation in ensuing years.\[We\]
It is my view, as Windsor Fund's portfolio manager, that there is a period of outstanding potential appreciation on the horizon. As a shareholder with a substantial portion of my family's resources invested in the Fund—and one who has personally and financially lived and breathed each good day and each bad day with the Fund since mid-1964—I hope you await the inevitable eye-catching appreciation of our Fund with the same solid confidence and eager anticipation as I do.
The Nifty Fifty fever broke in 1974, but the market did not come to its senses immediately. Investors abandoned the highly recognized growth segment and everything else in sight, including our merchandise. As the spectacular run ended and bloated p/e ratios fell earthward, the Nifty Fifty supplied a harsh object lesson in the hazards of too much faith in formidable growth stocks. At some point, even they cost too much. Some stocks took 7 years to recoup their losses; others waited 20 years.
In the Nifty Fifty days, we quarreled with the lofty prices and p/e ratios. But I had no irreconcilable aversion to highly recognized growth fare. Windsor owned several of them when opportunities arose, including IBM, McDonald's, Home Depot, Xerox, and Intel. Because the market tends to bestow relatively high p/e ratios on highly recognized growth stocks, however, they rarely represented more than 8 or 9 percent of Windsor's assets.
Lessons are only useful to the extent investors remember them. Memory in the stock market is notoriously short, as history has shown repeatedly. With all due respect for academic proponents of efficient markets, in my experience markets are continuously foolish, thanks to investors who, despite George Santayana's famous admonition, forget the past.
Investors usually invite catastrophe themselves, like two hunters who hired a plane to fly them to a moose hunting region in the Canadian wilderness. Upon reaching their destination, the pilot agreed to return to fetch them after two days. He warned them, however, that the plane could carry only one moose for each hunter. More weight than that would strain the engine, and the plane might not make it all the way home.
Two days later, the pilot returned. Despite his warning, each of the hunters had killed two moose. Too much weight, said the pilot. "But last year you said the same thing," one hunter declared. "Remember? We each paid an extra $1,000 and you took off with all four moose." Reluctantly, the pilot agreed. The plane took off, but after an hour gas was low. The engine sputtered, and the pilot was forced to crash land. The two hunters, dazed but unhurt, climbed out of the wreckage. "Do you know where we are?" one asked. "Not sure," said the other, "but it sure looks like where we crashed last year."
No more actual evidence is needed than events in 1998 and 1999, when investors again embraced a new generation of highly recognized growth stocks. In many respects, it looked to me like Yogi Berra's classic "déjà vu all over again," but with even more risk. This time, the dominant crop of highly recognized growth stocks included a less formidable phalanx. Caught up in Internet-related fervor, investors conferred highly recognized growth status prematurely on technology companies that lacked reassuring prospects. Their processes were new, and some of their technologies were embryonic. Also, competition had not yet taken its inevitable toll.
Look at a basket of stocks called the NASDAQ 100, which notched an 85 percent gain in 1998. It seemed outlandish to me that the total value of the stocks issued by these companies exceeded $2 trillion at year-end. But even more stunningly, less than 5 percent of more than 2,000 NASDAQ-traded stocks commanded 60 percent of its market capital and 100 percent of attention in the marketplace, especially from the media.
If this observation sounds awesome, consider another. Just five companies represented almost 40 percent of all the equity investment in the NASDAQ 100. That amounted to one fourth of the NASDAQ composite index investment and nearly 10 percent of the S&P 500. Even compared with the besotted Nifty Fifty era, never had so many paid so much for so few.
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Depends, SPY DOESN'T CARE, ONLY THE OWNERS WILL CARE

WE STILL GOT BOTS SPAMMING MEMORY IS OVER AND LOSERS THAT CARE ABOUT OIL STILL, AI RALLY CONTINUES.