The Great Roundtrip…and Broken IPO’s
Courtesy of Howard Lindzon
Good morning everyone.
I have a name for a particular stock growth era from May 2020 until January 2022 ‘The Great Roundtrip’
Poster stocks and charts of this era are Robinhood, Penn, DraftKings, Zoom, Zillow, Docusign, Peloton, Gamestop.
I made a visual of this great roundtrip versus the induces on Koyfin:
The real story is just beginning…
While these companies/stocks have round tripped in valuations (or nearly) the user growth has been sticky and mostly real, the companies are big and for most a certain moat is now massive. The hit to these companies valuations is public and taken.
What we do not see in the charts of ‘The Great Roundtrip’ are the 100’s of still private companies launched during this period as copycats or clones, whose valuations while private are silly and whose cap tables likely irreparable.
Now is the time for fundamentals to make a difference and there is an opportunity for amazing winners to be picked in this rubble. I will keep an eye on this list and add to it to see which companies left behind can turn a corner.
I wrote last week about ‘broken IPO’s’ and the prices have only gone lower. Keep an eye on both these lists now.
Finally…I added Tesla and Crude Oil to ‘The Great Roundtrip‘ visuals which is super interesting/humbling and a perfect reminder why picking stocks is hard and asset allocation and ETF’s are best for 99 percent of people
You can play with the chart if you have a FREE Koyfin account using this link.
