mercredi 6 mai 2020

Three high flyers (Shopify, Wayfair and Mercadolibre)

Here's three stocks I don't own and don't plan to own that would have made me way richer if I had put all my money on them 15 days ago.

Yes, I'd have 65% more money today than only two weeks ago if I had put all my money on Wayfair, Shopify and Mercadolibre.

Probably that nobody on earth put all his money on these three stocks. But, let's dream...

A few words on these 3 stocks:

Shopify: One year ago, you could buy a SHOP share for 350$. Today, it's prive is over 1000$. And yet, even if revenue grew like fuck, profitability is hardly there. For instance, EPS were 0,19$ for the last quarter. I can't understand how people value that company. I prefer to buy some expensive but very profitable stocks with a PE between 25-30 than some crazy valued company that's little or no profitable. Even if it's revenue grew by 50% each year over the recent past. When you don't know in what you invest, sooner or later, you'll get it in the ass.

Wayfair: A few months ago, I saw that the guys at Sequoia bought Wayfair. The performance of the stock was horrible and stayed horrible for some time. Revenu grew by about 100% between 2017 and 2019, but earnings kept on being negative. A similar case to Shopify. Both stocks however benefited a lot from shifting of shopping habits because of Coronavirus.

Mercadolibre: Same thing here. A lot of revenue growth (almost doubled in 2 years), but negative earnings.

So, they're 3 stocks with similar characteristics: very high revenue growth, no or very little profitability and very high valuation of the stock.

That's how that fucking market works. Excitation and presumptions about something that's not there but that could happen.

1 commentaire:

  1. It's like investing in any new business -- you put the money in before it's even open hoping for a good return in the future. In the first year or two if it looks like it has some promise, a good location, trendy, then someone might buy it for way more than it might be worth.
    In the stock market, many investors cry foul when this happens in stocks because it goes against those conventional, conservative rules that many investors look to as gospel. There's something for everybody in the markets.