July 14th, 2017
Hi, I’m Steve Dudash at IHT Wealth Management. Welcome to this week’s Wealthcast. So, I wrote an article that was in Forbes. Published I think late last week or early this week. And it was talking tech, it was talking Uber. And so I thought it would be a good way to tie in this week- we’ll talk some tech.
I get asked all the time about buying individual stocks. “Is it a good Company? Should I buy this? Should I buy that?” And I keep explaining to people over and over again, it’s not about “do you like that company today?” but “do you feel that they are going to continue to grow?” For instance, Uber. Uber today is wonderful. The technology basically made cabbies obsolete. They’re still out there, but shrinking everyday. Instead of hailing a cab, sticking your hand out, looking for it, or calling up and waiting for a car to show up- you hit a few buttons, car shows up waiting for you. You know exactly how much money it’s going to cost, you know exactly when it’s going to show up there. People use it, I love it, all the time.
But, Uber is going to IPO in the not-so-distant future. And they have a very big problem in front of them. Autonomous cars are coming. And for all those people out there that don’t want to accept it, I’m sorry. It’s going to happen. And it’s going to happen in the not-so-distant future. Ford, GM, Amazon, Google, Tesla, everyone is racing for that end game. And when that happens, the technology that will make a Company like Uber at risk of being obsolete.
Uber is losing the battle trying to get to the autonomous car. Other people are way ahead of them right now. And if they lose that battle, someone else will step into their place and be able to provide the same ride sharing services for much cheaper because they won’t have the cost of a driver and the things that are associated with that. And basically, will be able to push a company, like Uber, out of business. Maybe not out of business, but shrink them until they can match the technology. Why I’m saying this is because when Uber goes IPO, because they will, in the not-so-distant future, you will hear a story about them going IPO- I will get called, and people will say, “Should I buy Uber?” And I will come back to them and say, “Do you believe that Uber, is not necessarily a good company today, (because I think they are a good company today)- but do you believe that they will continue to be and be able to grow?” And that’s the real risk.
That’s like Snap Chat that came out 6 months ago, and people were asking, “Should I buy Snap?” It’s not whether or not you use Snap. I use Snap, a lot of people use it. But do you think that they are going to continue to grow in a way that justifies what you’re paying for. And they’ve proven they can’t. They are down 50% right now, they’ve got all kinds of financial problems. And that same story will come out in the not-so-distant future when Uber comes out. So think about this, when you’re investing your money- individual stocks- it’s not about do you like it today, but do you believe that company can continue to grow in the future to justify what you’re paying for it. So, I hope that helps a little but. Call me anytime, read the Article at Forbes, it’s a pretty good one. Or at least I think it is. So, call, email anytime if you have any questions. Have a nice weekend. Bye.