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A chart on IPOs. Zoom Video makes sense (Maybe not). Some really bad Don’t Do Stupids.

IPOs shouldn’t be reviled — just because WeWork messed up

Many succeed, even recent ones. JPMorgan sent me this chart:

One storied recent IPO was Zoom Video Communications (ZM). They’re in the ultra-competitive field of video-conferencing. Their pitch was they were better. I’m dubious. I did a Zoom video conference with Michael. This is what I looked like. Michael said it was not good. (He used a stronger word.)

Zoom dropped the call half-way through and Michael had to reboot. But it did work. I could hear and see him. Michael said Apple’s FaceTime had better quality.

You can do a free Zoom video call. Download the software at their site and off you go. Click here.

Even at today’s lower prices, Zoom is way overpriced. Finance Yahoo lists Zoom’s P/E Ratio (TTM) at 2,654.83.

Motley Fool loves Zoom and writes:

Its current market capitalization of $20.8 billion works out to a multiple of roughly 45 times sales. That’s down from the 60-plus times sales that Zoom fetched three months ago, and we’re still confident about the quality of Zoom’s business justifying that valuation.

Not me.

Don’t do Stupid

+ Don’t buy brain health supplements — e.g. Prevagen. Harvard Medical School writes:

A recent survey found that about 25% of adults over age 50 take a supplement to improve their brain health with the promise of enhanced memory and sharper attention and focus. The problem? There’s no solid proof any of them work. The main issue with all over-the-counter supplements is lack of federal regulation.

+ Don’t buy CBD laced-stuff.

CBD oil comes from cannabis plants — marijuana or hemp. Nobody knows if or how CBD works — except for seizure disorders in children. Some CBD stuff contains THC, the active ingredient in marijuana. CBD pushers say it treats sleep, anxiety, pain, etc. But there’s little evidence  that it works for any of those problems.

+ Don’t fall on the last step.

I’ve nagged on this a zillion times. Every time I write about the last step, several readers email me their horrible stories.  One person’s father died falling on the last step. That was the worst story.

+ Don’t vape.

The Centers for Disease Control and Prevention has intensified its warnings about the risks of vaping, saying there have been more than 1,000 cases of vaping damaging lungs. The CDC says to avoid all vaping products, especially those with THC.

+ Cars turning right at very dangerous. Be wary of them.

Susan nearly got killed last week by a Porsche Panamera which accelerated around a corner and nearly hit her in the pedestrian crossing. Pedestrian fatalities in the United States have increased 41 percent since 2008. More than 6,000 pedestrians were killed in 2018 alone.

Allison Arieff, a New York Times reporter, conducted an experiment on Twitter this summer, asking people to share my tweet if a car had hit them, or anyone they knew. It was shared thousands of times and more than 500 people shared stories of being hit, losing family and friends, and sustaining injuries that impact their daily lives.

You can read many of the stories which traffic accident victims sent her. They’re really horrible. But they’ll make you a lot more wary crossing a street. Click here. 

Was WeWork ever going to work?

That’s the title of a New York Times article, which contained two wonderfully delicious paragraphs:

It is not merely money that separates the ruling class from the rest of the country. Often it seems as if it is the gaping difference in the application of common sense. Ultimately, it was the bankers, technocrats, statesmen and acolytes of the data-junkie class who were willing to believe that Elizabeth Holmes, a 19-year-old college dropout who thought a black turtleneck would make her Steve Jobs, was going to revolutionize blood-testing. It didn’t seem to matter that she could not deliver any real evidence to prove it.

What the ordinary person might interpret as a con game or sheer lunacy, the heavily credentialed investor, with his TED Talk understanding of things, will reliably regard as brilliant eccentricity. While he may have nothing but disdain for the Fox viewer’s commitment to climate denial and birtherism, he has his own attraction to falsehood – a blind faith in “disruptive” innovation.

The full article is here.

The weekend in Boston was wonderful.

This is Claire, Sophie, Zoe and Susan swinging on The Greenway. Later we rode the Carousel. Super fun. Super nice weather.

Today I am flat in the market. I’ve updated the list of stocks I like.  See you tomorrow. — Harry Newton






  1. Mike Nash says:

    Harry, I’m surprised you never write about bonds. The stock market is flat to up a mere 1% in the past year. ON the other hand my bonds are up 5 to 8%. I don’t think you’re getting good financial advice since you avoid bonds and only buy stocks and cash.

    • harrynewton says:

      Some years bonds do better than stocks — but not every year. IN fact, not most years. You need also to factor in the dividends which many stocks pay. Those dividends are typically not reflected in the price of the stocks.