It's widely known that buying quality companies is a sound strategy, but many forget that valuation is just as important.
In the late 1990s, both stocks traded at high P/E ratios—Costco above 30 and Walmart above 40. Investors paid a premium, expecting continued growth. But what followed was over a decade of stagnation. Walmart’s stock didn’t break out of its range until 2011. Costco, despite strong business growth, stayed flat until 2010. The issue wasn’t t...