New holder here and fairly new SelfWealth user. I just...

New holder here and fairly new SelfWealth user. I just transferred over after IG introduced their inactivity fee (which might not be charged to me, but I don't like it hanging over my head), and the SelfWealth platform looked cool, which I still think.

For the platform: I like how the My Portfolio page shows a chart of my performance against the target portfolio and the market. IG and Commsec can't compare to that in their performance reporting.

For the WealthCheck Rating though, while they show a correlation to performance, isn't it circular? Like they suggest a high WealthRating leads to high results, but you generally only get a high WealthRating if you already have high results.

The targeting option of 'Top 10 Members' sounds crazy to me, though it's the most popular. I thought it previously included un-diversified lucky members, who would likely not be lucky again next year (even some of the top members have profile descriptions like "I'm just a beginner testing some things"). But looking at the holdings breakdown just now, I see it includes 11 ETFs and 9 other holdings, so it was just following the market for the past year anyway. So not as risky as I thought it was.


For the share: I was mainly buying since it looks like it's growing quickly, advertising costs are falling per signup (maybe due to more organic growth), and it looks like the expenses are reasonably fixed (I noticed that the projected cash outflow next quarter only show a minimal rise in employee expenses, admin costs etc).

If their cashflow outflow projection for next quarter is right, then it's for a 11% rise in costs.

'operating revenue up 37%' for last quarter. If it was 30% for next quarter, then revenue would be $1.318m with outflows of $1.770m. So net outflow from operations improving from (578) to (452). That's the trend I'm betting on - revenue rising faster than expenses.

If 11% / 30% held true for multiple quarters, then they'd be operationally cashflow positive in 3 quarters.

For the past 4 quarters, outflows actually reduced by 8.9% per quarter. Though I believe them when they say they expect costs to rise by 11%, since for the past 4 quarters they have been accurate with their outlook (over-estimating by 2.3% on average). Again for the past 4 quarters, revenue was up by 26.2% per quarter (including 1 weak quarter) and a 33.1% growth rate for the past 3 quarters.

So is my 11% / 30% assumption realistic? Probably. So I think cashflow positive in 3 quarters is realistic.

Then will the market cap rise from $22m once they're cashflow positive? Initially it'd be minimal cashflow of $100k or so, but if they keep up the growth rate of 25%+, then I expect there's lots of room for the SP to rise.