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Another week of portfolio outperformance reveals two simple truths about long-term success on Wall Street: Sometimes overconfidence is the only enemy in sight, and great stocks can go a staggeringly long way before they finally hit a limit. Spotify Technology SA (SPOT) is one such example, highlights Hilary Kramer, editor of Game Changers.

We have plenty of reasons to feel mighty confident. Game Changers holdings rallied another 9% recently against “good,” but dramatically less impressive, gains in the broad market. Take what the S&P 500 and Nasdaq did, double it, and you’d still be a little behind our stocks.

Spotify Technology SA (SPOT) Chart

Granted, we’ve held onto a few of our names longer than usual, raising our overall holding period to about seven months. But those longer-term holdings have rewarded our tenacity.

Spotify stock is currently our No. 3 trade of all time. Those of you who have been with me for years know that anything nudging 200% is a revelation. It has “only” moved 18X as fast as the S&P 500’s long-term trend.

Where will it go? Remember that second truth on Wall Street: A record-breaking stock can break record after record before it finally hits a wall.

And the first truth is always on my mind. One day, even a record-breaking stock will run out of gas. We need to cash out before we crash. I’m watching. When Spotify gets truly boring and the return rate starts eroding, it’s time to go.

For now, though, the math is our friend. Dropping out of the rally here will cost us a lot of theoretical gains and could mean we leave a lot of money on the table.

My recommended action would be to consider buying shares of Spotify.

About the Author

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. The Financial Times describes her as "A one-woman financial investment powerhouse," and The Economist distinguishes her as "One of the best-known investors in America."

Ms. Kramer independently published newsletters including GameChangers, Value Authority, High Octane Trader, 2-Day Trader, IPO Edge, and Inner Circle. She is often quoted in publications such as the Wall Street Journal, New York Post, Bloomberg, and Reuters. Ms. Kramer is a frequent guest commentator on CNBC, CBS, Fox News, and Bloomberg, providing investment insight and economic analysis.

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