When a stock approaches an all-time high, many investors instinctively become cautious. The reasoning seems straightforward: if a company has already delivered substantial gains, perhaps the easy money has already been made.
Yet the investing record of David Gardner suggests that this assumption can be dangerously misleading. His most successful picks show that powerful momentum before a purchase is not necessarily a warning sign.
In many cases, it can be evidence that a company is entering a period of extraordinary growth. Looking back at his hall-of-fame investments, including Amazon, Apple, Netflix, Intuitive Surgical, and Nvidia, a striking pattern emerges.
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Each of these companies had already climbed dramatically before David initiated his position. Rather than waiting for a beaten-down stock or attempting to buy at the absolute bottom, he recognized businesses demonstrating strong relative strength and continued to participate in their expansion.
The gains preceding his purchases were far from insignificant. These stocks had risen somewhere between 30% and 90% during the months before he bought them. To a conventional investor, such performance might have suggested that the opportunity had passed.
Instead, the strength appeared to reinforce the underlying investment thesis. The market was already signaling that investors were increasingly willing to pay higher prices for businesses with compelling growth prospects.
This distinction is important because momentum investing is not simply about buying something because its price is rising. Genuine momentum is often connected to improving fundamentals, accelerating earnings, expanding markets, technological advantages, or changing consumer behavior.
When those forces combine with strong price performance, the stock’s upward movement can become a confirmation rather than a contradiction of the investment case. Nvidia provides an especially powerful example.
The company’s extraordinary rise has been driven by its dominant position in accelerated computing and the explosive demand for artificial intelligence infrastructure. Investors who waited for Nvidia to become cheap after its initial advances could have missed substantial portions of the broader trend.
The lesson is not that every stock near a record high should be purchased, but that a high price alone does not determine whether an investment remains attractive.
The same principle can be seen in Amazon, Apple, Netflix, and Intuitive Surgical.
Each company represented a different structural opportunity, yet their market trajectories shared a common characteristic: investors were increasingly recognizing their long-term potential. Their previous gains did not automatically eliminate future upside.
For investors, this creates an important psychological challenge. Humans naturally anchor to previous prices and often interpret a rising stock as expensive simply because it was cheaper in the past. But valuation must be considered alongside growth, competitive positioning, addressable markets, and future cash flows.
A stock can rise substantially and still become more valuable if the underlying business is improving even faster. Momentum, therefore, should not automatically be feared. Relative strength can provide useful information about how the market is evaluating a company’s prospects.
The key is distinguishing sustainable momentum from speculative enthusiasm. David’s record ultimately challenges the belief that investors must always buy low to make meaningful returns. Sometimes, the strongest opportunities are already demonstrating strength.
The real question is not whether a stock has risen, but whether the reasons behind that rise can continue. For disciplined investors, that distinction can turn an intimidating all-time high into the beginning of a much larger opportunity.