Investing for a long term wealth creation? Make note of 3 key investing mantras

livemint.com:

Tesla, once the poster child of the growth investor and a conversation starter around cocktail parties, which is down around 60% from its highs as its growth trajectory becomes more opaque.Have you ever noticed how the best and shiniest seem to grab the most eyeballs, even in the business world? EV, AI, and space-related industries are some recent examples. High-growth industries attract many aspiring entrepreneurs, investors, and established companies.

However, over time, some of these industries stop generating higher returns due to the increased competition, which eventually leads to once-glittering companies getting derated in the future.There seems to be some disparity here. We invest in stocks in the hopes that our chosen pick has embarked on a journey to potentially increase returns from present levels, but the gravity of attraction actually leads to de-ratings in the company because of the increased focus on the sector.Market information becomes more accessible every decade with advances in technology and data analytics.

However, thanks to the improved ways of screening for stocks, some investors may crowd into companies that are benefiting from high growth rates but at the price of high multiples. This excitement may be further ‘endorsed’ by media outlets crowning their achievements.

Take the recent example of Zoom. During the pandemic, the company definitely experienced high growth rates as a result of the lockdown, and the term "Let's Zoom" became part of everyday life and still is.