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How to evaluate the share register of a company, page-8

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viperofpitstorm

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26/11/18

10:46

Post #: 36637759
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Originally posted by Anton Chigurh ↑

A few other ones that can be important imo:

- Large potential addressable market; so punters can talk about "Wow! If they only capture 1% of xyz, that's x billion of revenue! " This encourages you to forget about the actual chance of success.

- Detached from balance sheet/reality; if you can't measure a company's revenue potential in any meaningful way (or even what it actually does) it's easier to dream, which means nearly any mc can be justified, once fomo kicks in. Brainchip (BRN) was the best example in recent years, when it did 30-40 bags from memory.

- Disruptive; disruption is easily the hardest thing to achieve for a startup, COS is minute but it generates to biggest investor fomo of all.

- At least one ex-executive from a large corporation; this is a clever one because intuitively, a naive investor thinks, "surely, a director from Intel wouldn't waste their time with a startup if it wasn't the real deal." You only have to look at the roadkill of ASX techs and bios to see how false this assumption is. Execs move in and out of roles for all sorts of reasons and working with a startup of limited means is the polar opposite of the large budgets and regimented processes you get in large companies. It doesn't follow that someone who's worked for Intel will be a good fit for a $20m ASX tech. Great marketing though.

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That is absolute gold. This conversation goes in the cognitive bias basket for me, a lot of similarities in a sense.

Did you miss over subscribed? But x and Y are running it's a sure thing.
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