Companies to AVOID

/THREAD/

Some tips by Peter Lynch, one of the most successful investors of all time, on which companies to avoid investing in

1. Hottest stock in the hottest industry, with nothing but hope and thin air to support them (MJ stocks in 2017, internet stocks in 2000, electric vehicles in 2020)

Deteriorating balance sheet.

When analysts predict double-digit growth forever, the industry goes into decline.
2. Product/service, not protected by patent or niche, easy to be replicated by competitors, especially in a high-growth industry.
3. The "Next Something"

Everyone wants the next $TSLA, $AMZN, $GOOG

Most likely you won't find a company to replicate their business with that success.
4. Diversification = companies wasting capital on foolish acquisitions, in new sectors they do not understand, and in companies that are overvalued.
The only benefit for investors is when they own shares in the acquired company or when finding opportunities in turnaround companies after restructuring.
5. The whisper stock with very imaginative and nearly impossible ideas, which are very complicated (gene editing, biotech, space travel).

IPOs with new risky enterprises with no track record.
6. Middleman companies that rely heavily on supplying to one company.

$FSLY dropped like a brick when Tic Tok, their biggest client by far, was banned from the US.
7. Exciting name in mediocre company that sounds fancy and attracts investors, giving a false sense of security (micro..., electric ..., digital....)

/END/
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How much do you need to support yourself in retirement and when do you want to


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The Mother of All Squeezes

How Volkswagen went from being on the brink of bankruptcy to the most valuable company in the world in two days

/THREAD/


1/ At the peak of the 2008 financial crisis, Volkswagen was considered a very likely candidate for bankruptcy.

Heavily indebted and already financially struggling before 2008, with car sales expected to plummet due to the ongoing global crisis.


2/ With GM and Chrysler filing for bankruptcy in 2009, shorting the VW stock would seem a safe bet.

If you are not familiar with stock shorts and short squeezes check my thread


3/ On October 26, 2008, Porsche announced it had increased its stake at VW from 30% to 74%.

This was a surprise to many who were led to believe that Porsche wasn't planning a takeover of VW, based on the company's announcements.


4/ Before the announcement, the short interest was approximately 13% of the outstanding shares, a number considered relatively low.

Porsche had a 30% stake, the Lower Saxony government fund held 20% of the shares, and another 5% was held by index funds.

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