Asked by Anonymous
Asked on 14 Aug 2018
How do I spot potential in companies/industries?
Honestly speaking, much opportunities often come only in China or U.S. where the market size is so huge - giving a long runway for them. In addition, investors there are more growth-oriented (Tesla and Amazon can keep making losses but still crack all time highs) while Sg-investors focus more on valuation and income.
Thus, go for stocks there. You can go for those famous brands but still not as famous as the FAANGs, like spotify, shopify, IPG Photonics Corporation, JD etc.
Statements as such have imbued logical fallacies in them, known as "connecting the dots backwards". Its very easy to look back and claim you saw it all coming, but its not often the case. There are more than 1000s of IPOs worldwide yearly- of which less than a 1% have made it big to FAANG levels. If u search online, there are plenty of articles going along "if I have invested in $100 in apple/google/amazon/facebook when it IPOed, it would be worth more than ~100x multiples of that today." The truth is if you indeed bought a stock at say $100, you would have likely sold it even before it shot up to 10 or 20x multiples. Even if you did buy stocks for the long term(10 year horizon), chances are, investors would not have picked a winner close to success like FAANG.