Last week Domino’s Pizza broke out to yet another stunning new high. This is a share we bought at 75p in 2004 for our family investment club and I’m proud to say we still hold. It’s now trading at 1043p per share making it a 14 bagger over an 11 year period – a 27% annualised capital return before dividends. Domino’s hasn’t just been a long term winner…. it’s been a standout performer in almost every 2 year period since it first bounced up from its lows back in 2001. Even in the last 2 years this stock has doubled in price and in all this time it’s almost never, ever been cheap. Since the financial crisis I don’t think Domino’s has traded beneath a Price Earnings ratio of 23, which begs the question of when on earth could a value investor have ever bought this share? If Value Investors admit they couldn’t then isn’t there something that they are missing?
The problem with value investingWe human beings are genetically hard-wired to look for bargains. If you can pick something up for less than it’s worth you might just have a happy outcome and a…
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