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The market can stay irrational longer than you can stay solvent.

H8crilA 7y ago
Yeah, a better bet would be about those companies actually delivering profits and "growing into their vaulations", as people politely put it. None of those companies have earned a single dollar for shareholders. Not a single dollar.
- AznHisoka 7y ago
  Didn’t early stage investors in Uber and Pinterest made money when they IPO’d?
  - H8crilA 7y ago
    I said "companies delivering profits", not "people making money trading the stock". I'm sure speculation can be profitable on such volatile securities, after all volatility is everything for traders. But there's nothing here (so far) for a fundamentals based long term investor to write home about. Zero.
- MichaelApproved 7y ago
  > None of those companies have earned a single dollar for shareholders. Is that what shareholders are asking for, right now? Don’t they want fast growth more than they want profits?
  - H8crilA 7y ago
    I suppose, yes, and this is a little scary - the world being in such a state that you can wait 10 years for a company to make profits and it is still considered OK. Cheapening money. But also how much longer can we wait? Google, Apple, Microsoft and Facebook were all turning profit before the IPO! Find the old S-1s if you don't believe me. And back in those days IPOs happened much much earlier.
    - MichaelApproved 7y ago
      I think Amazon is one of the rare examples where it paid off. They were making losses in exchange for extreme growth in many sectors.
      - kmonsen 7y ago
        Amazon made very controlled losses, and it was clear the core business was good and they were investing in new ideas. Sort of like alphabet except much bigger.
      - anongraddebt 7y ago
        Correct me if I'm wrong, but Amazon was strongly cash flow positive as of 2002. Moreover, their operations were throwing off cash the year they went public (1997). Everyone should be considering this a bit more because it says something about the irrationality of the current market. Large VC funds were investing under the thesis that some of the current crop of (now) less than impressive unicorns could follow the Amazon model: invest in growth at the expense of net income. These unicorns haven't simply failed to produce positive net income by intentionally following the Amazon model, rather they've simply burned through mountains of cash following less than impressive business models. They never followed the Amazon model to begin with.

Yeah, a better bet would be about those companies actually delivering profits and "growing into their vaulations", as people politely put it. None of those companies have earned a single dollar for shareholders. Not a single dollar.

AznHisoka 7y ago
Didn’t early stage investors in Uber and Pinterest made money when they IPO’d?
- H8crilA 7y ago
  I said "companies delivering profits", not "people making money trading the stock". I'm sure speculation can be profitable on such volatile securities, after all volatility is everything for traders. But there's nothing here (so far) for a fundamentals based long term investor to write home about. Zero.
MichaelApproved 7y ago
> None of those companies have earned a single dollar for shareholders. Is that what shareholders are asking for, right now? Don’t they want fast growth more than they want profits?
- H8crilA 7y ago
  I suppose, yes, and this is a little scary - the world being in such a state that you can wait 10 years for a company to make profits and it is still considered OK. Cheapening money. But also how much longer can we wait? Google, Apple, Microsoft and Facebook were all turning profit before the IPO! Find the old S-1s if you don't believe me. And back in those days IPOs happened much much earlier.
  - MichaelApproved 7y ago
    I think Amazon is one of the rare examples where it paid off. They were making losses in exchange for extreme growth in many sectors.
    - kmonsen 7y ago
      Amazon made very controlled losses, and it was clear the core business was good and they were investing in new ideas. Sort of like alphabet except much bigger.
    - anongraddebt 7y ago
      Correct me if I'm wrong, but Amazon was strongly cash flow positive as of 2002. Moreover, their operations were throwing off cash the year they went public (1997). Everyone should be considering this a bit more because it says something about the irrationality of the current market. Large VC funds were investing under the thesis that some of the current crop of (now) less than impressive unicorns could follow the Amazon model: invest in growth at the expense of net income. These unicorns haven't simply failed to produce positive net income by intentionally following the Amazon model, rather they've simply burned through mountains of cash following less than impressive business models. They never followed the Amazon model to begin with.