I’ve just been consulted as to the current state of my holdings as being “somewhat dire” and “unsustainable.” I then reached out to an industry expert who relayed to me some analysis on growth stocks as being “uninvestable”, “merely shells built upon rocks” that were only good when they were going up. Now that they’ve gone lower, and continue to do so with vigor, they shall continue to go lower.
Do you follow me champ? Good.
To find the true value of you securities, you need to take the Mr. Wonderful approach to its balance sheet and ask “how much does this company earn?”
For example, if the CEO of Yelp, Jeremy Stoppelman, went on Shark Tank and asked Mr. Wonderful for a bridge loan, Mr. Wonderful would ask “how much money do you make?” Jeremy would reply “zero.” After hearing those words, Mr. Wonderful would say “you have a good website, but a bad business. It’s worth zero. I am out.”
DATA is making a little bit of money, so it might be worth, say, $3-10 per share. But FEYE and its 6 billion dollar market cap of madness, it is worth a donut, a big round zero. Their products might be good and their growth “cool,” but they are losing money. Therefore, ergo, their NAV is $00.00.
Moving on, SPLK is worth $00.00 and WDAY is worth a touch over $100 million, which is over $13 billion less than its current market cap.
In other words, my holdings are very bad, especially bad actually. I still own IFON and they are making money, so they are worth more, mind you, than YELP and FEYE combined, despite having just a $40 million market cap. My point is, all of these names that have losses are on their balance sheets are worth no more or less than zero.
It’s also worth mentioning, iBankCoin is a very profitable organization, with gross margins in excess of 90%. We, in fact, are worth more than YELP and might make a tender offer (of $00.03, how generous of me!) for the entire company, very soon.
FYI: If you’re thinking about buying stocks now, don’t. Tomorrow is Friday and no one wants to get long over the weekend. Who knows what will happen on Saturday and Sunday. Then we will get the classic “black monday” 15% gap lower. So, if you’re gonna buy, do it then for the Tuesday-Wednesday bull market.If you enjoy the content at iBankCoin, please follow us on Twitter