Great companies are not necessarily great stocks

“Investors play a different game. They generate superior returns when they correctly anticipate revisions in the market’s expectations for a company’s performance. Investors do not earn high rates of return on the stocks of the best value-creating companies if those stocks are priced to fully reflect that future performance. That is why great companies are not necessarily great stocks. An investor uses competitive strategy analysis as a means to anticipate revisions in expectations.”

Excerpt From: Michael J. Mauboussin. “Expectations Investing.”