“There is nothing new under the sun”
That’s the kind of statement thrown around by middle-aged men halfway through their pint of stout. It’s an axiom — a self-evident truth.
Boiled down, it means that there is nothing new in this world. Nothing that is happening now, hasn’t happened before.
Now, if you want to get pernickety, you could argue that the Pharaohs weren’t catching up via Zoom and driverless chariots hadn’t really kicked off back then.
It has a broader meaning; human behaviours and ideas haven’t changed all that much over the years. Facebook is your alumni gathering of ye olden day, Snapchat is your polaroid and Instagram is your yearbook. Now, it’s probably fair to say that these similes are a bit of a stretch…however, not ridiculous.
Flicking through the broadsheets recently, I was stunned to see that Deliveroo is currently valued at $6 Billion, albeit privately, with an IPO likely to value the Company at around $140 Billion. To put that into perspective; the prospective valuation almost meets the combined market capitalisation IBM, General Motors, Barclays Bank
This hits home. A few years ago, I ordered a Deliveroo to my gran’s house. She opined “Delivery lads on bikes?! We had them when we were growing up”. My gran grew up in the 1930s. There is nothing new under the sun.
Now, I know that Deliveroo isn’t simply lads on bikes delivering sausages from the butcher. It probably prefers to be known as “Real-time analytical platform for logistics” or other buzz words rich text.
When you strip away all that nonsense, though, it is butcher’s boy, on bikes, delivering grub on a large scale. And it is expected to be valued, by the stock market, at £120 Billion.
It doesn’t even make a profit. I’m sure it has some innovative technology, and I know it has built a robust technological infrastructure…but remove Deliveroo from people’s lives tomorrow, and there will be very few tears. Remove Facebook, and there might just be riots.
This all makes me think that there is a very real “bubble” at play in the stock market currently.
And the thing about bubbles, is, well, they burst.
Warren Buffet once philosophically opined that “When the tide goes out, we will see who has been swimming without clothes”. I’d wager that, when the bubble bursts, the genitalia of non-profit making Companies will be visible to all.
With all that in mind, it’s time to return to good old commercial values. Products. Profit. Longevity.
Top 5 Undervalued Companies:
- Hudson Technologies. As seen by the Vaccine news of late, cold chain storage is at a premium. Not to mention global warming causing the ambient temperature of the globe to rise. Tech that provides enhanced cooling to data rooms, transport and off-site storage will continue to be very valuable. Valued at $48 Million, a snippet of Deliveroo.
- GW Pharmaceuticals. If COVID had proven anything, it is that traditional pharmacology is fallible. Medicine isn’t perfect. A read at “Bad Pharma” by Ben Goldacre will reinforce that opinion. Governments around the world will be looking at two things. Plant-based medicine alternatives and innovative ways to raise taxation revenues. GW, who studies the medicinal properties of the cannabis plant, ticks both boxes and is valued at $3.71 Billion
- Twitter. Jack Dorsey’s creation has had a rough ride lately on the stock market, with the share price plummeting over the last few years. Take a look at big business customer service functions on there and look at the way breaking news is delivered and curated, and you will see that Twitter has the kind of intrinsic value that will safeguard it in the long run. $44B, still pretty cheap relative to Deliveroo.
- Eve Mattresses. OK, a bit of a weird one. A left-field punt. Eve makes…mattresses. They make them very well, though, and are an incredibly attractive penny stock. The world needs good sleep right now, and its innovative and ergonomic approach makes them well placed to grow. I won’t list its market cap, as it is a fraction of Deliveroo and, well, they aren’t really in the same leagues. Eve is a penny stock.
- Berkshire Hathaway. In the interests of diversity, I have included an investment fund. It might not be too exciting, but what Berkshire offers is commercial sanity amidst a lot of naked swimmers. Watch the Sage of Omaha pick up a lot of bargains and turn them around. He might even pick up Deliveroo, who would know.
For every hype generating bonanza such as Deliveroo, there are good honest profit turning Companies out there. There is nothing new under the sun and profit will never, ever go out of fashion.