{"id":604,"date":"2021-02-26T18:07:54","date_gmt":"2021-02-26T18:07:54","guid":{"rendered":"http:\/\/www.apisbull.com\/blog\/?p=604"},"modified":"2020-08-26T18:12:29","modified_gmt":"2020-08-26T18:12:29","slug":"irrational-fads-vs-speculating-on-growth","status":"publish","type":"post","link":"https:\/\/www.apisbull.com\/blog\/?p=604","title":{"rendered":"Irrational Fads Vs. Speculating On Growth"},"content":{"rendered":"\n
We\u2019ve seen bubbles built on speculation and positive feedback profit loops that have investors chasing prices and driving valuations through the roof, like the real estate bubble in 2008 and the Dot-com bubble in the early 2000s.<\/strong>

We\u2019re talking billions of dollars of boom and bust cycles.

In some instances, such as the Dot-com era, there was real growth taking place and valuations simply got ahead of themselves as opposed to the Beanie Babies trend which turned the founder of the company into a billionaire.

Some bubbles represent a true value proposition at some level that temporarily gets out in front of itself.

Ty Warner, the founder of Beanie Babies in the early 90s popularized a stuffed animal and created a global sensation. Through successful marketing, creative launches and then discontinuations, which would create scarcity, the frenzy sky-rocketed into a collector\u2019s hobby and had people thinking they were BRILLIANT investors. And through feedback loops and a complete societal craze I vividly remember, collectors were in some cases spending as much as $5,000 of dollars on a single one that otherwise was sold for $5 retail.<\/strong>

Mind you, in the middle of the bubble, these collectibles were liquid and people were actually making money. But once enthusiasm started to fade, stuffed animals selling for hundreds and even thousands of dollars, were sold in thrift stores for pennies.

Of course,<\/strong>\u00a0the foundation of this craze was unsustainable and had no long-term viability because stuffed animals aren\u2019t that unique, they are not inherently limited. and provide no true revolution.<\/strong>

This is what I would consider a mini-bubble that may or may not ever happen again for a stuffed animal.

There is for me a clear distinction between a bubble like this and something like the Dot-com bubble of the late 90s and early 2000s. This boom-bust represented a societal change of technological advancements that will provide real utility for people despite irrational exuberance that continued to feed prices higher. So much so, we\u2019re in an era NOW where tech dominates the financial world and is dwarfing other sectors of the economy currently.<\/strong>

Priceline.com was an example of instant success in the tech boom launching in April of 1998 solving the issue airlines were having not selling all of their seats on a flight and giving customers a chance to fly at a discounted rate facilitating this online platform for win-win scenarios.

In March of 1999, the company went public at $16 per share and on that first day spiked to $88 per share then settled at $69 giving the company a $9.8b valuation. They set records and weren\u2019t even profitable actually losing $142.5M in its first few quarters in operation.<\/strong>

This was happening largely across the board.

In October 1999, the market cap of the 199 internet stocks tracked by Morgan Stanley\u2019s Mary Meeker was an astounding $450 billion. Profits were fugazzi and didn\u2019t matter because the cumulative collective losses totaled $6.2 billion.<\/strong>

With the Fed raising interest rates three times in 1999 and two additional times in 2000 air was ready to be released from this bubble.

In just one month after hitting an all-time high at the time, the Nasdaq fell by 34.2%.<\/strong>

Priceline plummeted by over 90%.

Over the next 18 months hundreds of companies lost 80% of their stock value and a negative feedback loop began.<\/strong>

But today Priceline.com still exists along with other tech giants like Facebook, Amazon, Netflix, and today companies like Zoom and Tesla are soaring as well. And if Priceline.com wasn\u2019t so exposed to the travel industry which is in shambles, it would probably be at all-time highs.<\/strong>

The Dot-com bubble was symbolic of a forever change in society and anticipated what was to come in an indefinite boom.

\u00a0Trend identification is what I focus on, specifically, being early.<\/strong>

There\u2019s a true millennial shift happening now where people are eating healthier and avoiding the consumption of different meats, especially red meats which large consumption has been linked to increased instances of heart disease, cancer, and even Type 2 diabetes.

Health is not in a micro-bubble but an overall indefinite growth trend I see as critical as the tech sector.

Investor Alert: Immediately Consider Shares of The Very Good Food Company (CSE: VERY & US: VRYYF)!<\/strong>

Plant-based meat alternatives is the business model this company focuses on.

The stage has been set. Beyond Meat<\/em>\u00a0has $298M in revenue in 2019 and the market values the company at USD$8B market cap. If\u00a0The Very Good Food Co. (CSE: VERY & US: VRYYF)<\/strong>\u00a0could do HALF THAT in 2022, its value could be CAD$4B using the same model, a potential 3,000% return!

This early-stage company, (VERY), which is growing its sales by HUNDREDS OF PERCENT per year and is an important company I\u2019m following that has IPO\u2019d in 2020!<\/strong>

Society is shifting towards plant-based food options that taste great. The attempt to mimic the taste of meat without using animal products is a mystery that is being solved, and the feedback from consumers is resoundingly favorable.

This is exactly what VERY focuses on.<\/strong>

It has NEGLIGIBLE DEBT, plenty of cash, and THICK PROFIT MARGINS, which WE FORECAST TO be about 25%.<\/strong>

From inception, their concept has generated virality, literally starting at a grassroots level through a crowdfunding campaign and then going off to capture the attention of millions of people by appearing on Canada\u2019s version of Shark Tank, Dragon\u2019s Den.<\/strong>

Their business model is primarily two-fold:Online sales and e-commerce
Sales in physical locations
With COVID-19 front and center in 2020, demand for clean and healthy calories are off the charts and with large-scale paranoia of leaving the house, delivery options that minimize exposure to the outside world are causing a surge of demand for this early-stage company.<\/strong>

This is a company that has hit the ground running and has identified an unstoppable trend I want my readers aware of.<\/strong>

Consider shares of\u00a0The Very Good Food Company (CSE: VERY & US: VRYYF).We\u2019ve seen bubbles built on speculation and positive feedback profit loops that have investors chasing prices and driving valuations through the roof, like the real estate bubble in 2008 and the Dot-com bubble in the early 2000s.<\/strong>

We\u2019re talking billions of dollars of boom and bust cycles.

In some instances, such as the Dot-com era, there was real growth taking place and valuations simply got ahead of themselves as opposed to the Beanie Babies trend which turned the founder of the company into a billionaire.

Some bubbles represent a true value proposition at some level that temporarily gets out in front of itself.

Ty Warner, the founder of Beanie Babies in the early 90s popularized a stuffed animal and created a global sensation. Through successful marketing, creative launches and then discontinuations, which would create scarcity, the frenzy sky-rocketed into a collector\u2019s hobby and had people thinking they were BRILLIANT investors. And through feedback loops and a complete societal craze I vividly remember, collectors were in some cases spending as much as $5,000 of dollars on a single one that otherwise was sold for $5 retail.<\/strong>

Mind you, in the middle of the bubble, these collectibles were liquid and people were actually making money. But once enthusiasm started to fade, stuffed animals selling for hundreds and even thousands of dollars, were sold in thrift stores for pennies.

Of course,<\/strong>\u00a0the foundation of this craze was unsustainable and had no long-term viability because stuffed animals aren\u2019t that unique, they are not inherently limited. and provide no true revolution.<\/strong>

This is what I would consider a mini-bubble that may or may not ever happen again for a stuffed animal.

–