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tjmatho

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20/11/21

09:35

Post #: 57719129
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Originally posted by Ryzie: ↑

I really can't understand the complaints about management. They've continually made good decisions with financial stability at the forefront, this in return provides safety to shareholders. It's one thing to be annoyed at share price performance which can easily be explained by a shift in inflation but it's entirely another thing to be annoyed at the decisions made by management. Actually I can understand complaints by novice investors. Watching the share price decline the way it has would be quite concerning with money invested and a lack of experience.

For those people I'll share this interesting story about the Amazon IPO.

Investors who stuck with Amazon through the roller coaster ride of the dot-com bubble around 2000 would have been handsomely rewarded for their patience. The stock soared from a split-adjusted IPO price of $1.50 per share to $106.69 per share on Dec. 10, 1999. From there, it proceeded to fall 96% until it bottomed on Sept. 28, 2001, at $5.97 per share.

It's amazing to think about it, but even if you had bought Amazon shares at the peak of the tech bubble in December 1999, you would still be up more than 1,500% on that investment. It's an important lesson that investors tend to undervalue fast-growing companies with massive opportunities to expand. Just because a stock looks overvalued doesn't mean it is.I'm certainly not saying that IOU is Amazon or that it's performance would be the same or similar. I guess what I'm saying is that the share price doesn't always depict the true value of an asset. The share price is the markets perception of an asset at a given time based on other economic factors. Buying speculative businesses is probably one of the most exciting places to be involved in the share market because the share price is often at odds with the potential of a new business which can offer the greatest opportunity for share price increases. It can also provide opportunity for the greatest share price decreases as well. This is why it pays to acquire an understanding of the business and the people that run it. The decisions management make in speculative businesses is crucial to chances of success. Investing capital rather than spending capital is one of those good decisions. Securing a strong foothold in Malaysia before pushing expansion is another strong decision. Remembering that these decisions are based on financial stability which translates to business longevity. It's not about growing the fastest, it's about lasting the longest. Business is an infinite game and if you can't stay in it forever you won't survive. There's a reason APT opted to be acquired at this stage when BNPL only makes up 1% of global retail sales. There's still plenty of room to grow the business but how long can a business sustain losses close to half a billion dollars? The bill always comes due.

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Agreed - Great analysis. It is hard for the novice to separate Emotion and focus on the data. Posts like these provide that perspective.

IOU Price at posting: 20.5¢ Sentiment: Hold Disclosure: Held
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