Investing in the stock market is in many ways a test of both analytical skills and psychological patience. There is an expression that often recurs among the experienced, which goes that “ you can be right in your analysis, but still get the stock wrong” . At first glance, this may sound contradictory – if the analysis is correct, shouldn’t it also mean that the market rewards you/the company with a rising price? However, the reality is more complex.

A company’s fundamental value is determined by its long-term ability to generate profits and free cash flow, but as is well known, the share price in the short term is affected by a number of factors that extend far beyond the company’s control – macroeconomic trends, interest rates, geopolitics, industry sentiment, short selling or pure market psychological fluctuations. Even the most well-diversified and well-managed company can see its share price fall if risk appetite disappears, liquidity is strangled or the investor community simply turns its attention elsewhere. 

This means that you and I, who see ourselves as investors, may have done a thorough analysis, concluded that the company is undervalued and that the long-term potential is good, but despite this, the price moves in the opposite direction. Time – time in the market – then becomes a decisive factor. Do we have the endurance to wait for the market to catch up with the underlying fundamentals, or do circumstances change so much that our analysis becomes outdated before it is rewarded? 

In addition, timing is often as important as analysis. A company may be worth buying in five years’ time, but overvalued in six months’ time. If you enter too early, you may experience several years of negative price development even though you were basically right about the company’s strengths and this not only can, but must be put in relation to the alternative return. On the stock exchange, therefore, it is not only the question  of whether you are right, but also  when . Price is what you pay, value is what you get.

This is one of the reasons why humility is a key investor virtue. Being right about something is no guarantee of short-term success, and being wrong in the short term doesn’t necessarily mean the analysis was bad – in fact, it could have been really good. Rather, it’s about navigating a world where psychology, herd behavior, and external shocks constantly cross the line of rational calculations.

To deal with this, investors need both patience and a clear strategy. Those who invest long-term must accept that the market sometimes does not see what they themselves see – yet. Those who can handle this discrepancy between analysis and share price also have an advantage: they become less vulnerable to noise, more persistent in their investments and thus better positioned when the market finally revalues. In addition, they learn a lot and, not least, develop their psyche.