Invest in profitable companies

  • May 9, 2019
  • admin

Invest in Profitable Companies

Invest in Profitable Companies

You might be thinking … “Duh!  Of course I’m only going to invest in profitable companies”.  Yet surprisingly, there is a frenzy for buying ‘profitless’ companies.

How to lose 40% of your investment in 6 weeks!
Let’s look in the USA Technology Sector.  The Initial Public Offering (IPO) of Uber competitor, Lyft in March 2019. Their share price hit a high of US$88 valuing the company at over US$26 billion. Six weeks later it was US$53 – a whopping 40% loss. Notably, Lyft has never made a profit. Last year it reported losses of about US$800 million.

Uber IPO
Uber is listing in the USA on Friday 10 May 2019. Once again, people are scrambling to get involved and the offering is over-subscribed. Uber is a familiar name.  Many people who buy into this will do so just because its a familiar name – their kids use it, they use it and so they will think Uber must be doing well. When in fact, Uber has never made a profit yet is currently valued at over $90 billion. Last year it reported losses of about $3 billion.

Afterpay (APT)
In the Australian market, Afterpay is in the same category – it hasn’t made a profit yet either. It is currently valued at over $6 billion.

Bottom line:
Give yourself a chance & decrease risks – buy profitable companies.


Stock Market Investor Education:
Invest for Success’  is a face-to-face weekend course with Wealthwise Co-founders, followed by 4 x 1 hr online sessions over the following month.  Call David or Kate for more information +61.2.9488.9900.

Image by Andreas Lischka from Pixabay

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