When Apple bought a music streaming company to add to their iTunes music streaming, and then Amazon is going to launch free music streaming for Prime members, I decided that Pandora had too much SERIOUS competition for a company that was still losing money and had a hopeful forward PE of 200. I sold out at a loss at $25.10 give or take. Just better places to put my money.
This was from Post #40 on this board on the subject of regrets about decisions. I cut it way down.
I make mistakes but I don’t regret my decisions in the sense of kicking myself for mistakes. I figure I did the best I could at the time. I also don’t anchor on a price. For example when TSLA went from $30 to $75 in no time, I sold half my position. I then saw it continue up to $110. When it got back to $90 I got back in. I didn’t feel I had to wait for it to get back to $75 where I sold it. In fact when it was at $90, EVERYONE on the TSLA Board was saying they’d buy back in at $60 or $55. NOONE thought it would continue up. I figured if everyone figures it will go down, it won’t. And it didn’t.
Hi Saul, I hold Pandora - am an avid listener and I pay the nominal subscription fee to to avoid the ads. Love the service, but agree that it may not be the strongest investment, so was considering the same. But then I started thinking that they might be a valuable takeover target for Microsoft or possibly Amazon. This week I also thought the same about OPEN, but sold out anyway.
In any case, what are your thoughts about holding companies where you’ve lost confidence in their moat/business model but believe that their assets make them a worthwhile pickup by a larger player?
I decided that Pandora had too much SERIOUS competition for a company that was still losing money and had a hopeful forward PE of 200.
This just appears to further corroborate your thinking around earnings. Without earnings, sooner or later, the market’s going to punish the stock because the market would sooner than later get impatient waiting for the company to turn in a few bucks of profit. Earnings are irrelevant only for the very best of best and the only one I can think of is Amazon, which does earn gobs of money but reinvests almost every dime to take market share. I suppose Netflix could be another one, having built a fortress by reinvesting in the business.
I haven’t looked at Pandora’s financials. This was another one that never interested me. There were just too many streaming music players: iTunes, spotify, lastfm, all the satellite streaming services etc. But, I still wonder how much of the earnings vanished because of reinvestment in business.