From value investing to unicorn : Transition

Unicorn is a term in the investment industry, and in particular the venture capital industry, a company usually Start-up, which is not listed on any of exchange and so the official Published performance record, whose valuation has exceeded (the somewhat arbitrary) $1 billion dollars.

IT changes human life in many ways. Investment is also not untouched by it. It reduce the cost of investment but also change habits of investment. Before website, internet, email, Google Facebook and Amazon emerge, We have companies. But they are in Tangible world. There are factories. The company need to perform and show the Profit to its investors. Even in that Case, not all Investors are aware about the company and what it is doing about. (Situation is still same with Google. I don’t know what they are doing actually.) Analysis report of any one Is respected and checked like Bible(I am not joking) That time Information about anything is hard to GET. Most of the time only promoters known about company the real picture. So its easier for Me. Market to pay wrongly for any company. So its not difficult for you to find Some misprized Companies.

Now we are living in different world. Here there is no need to even perform. There are some companies which are not listed on any Exchanges and still quoting That their value is More than one billion. But that is not new. During Dotcom bubble, When venture Capital funds are not active. So the way for company to Acquire funds is to list itself. From that point we saw some Big names. The effect? The domain name of Google.com, amazon.com, Facebook.com, FB.com have great value. Some of them are like property of the respected companies. No shocked that Domain names also become Alternative Investment.

So, what to do? Nothing. Today’s world just change the terminology. Nowadays, growth and Value investing mixed up and we are watching the brand new way of investing. Just take an example of amazon. I know that company is not Profit making. But still there is sufficient big market share Amazon is holding. They are famous for their services. Plus some of their subsidiaries are making good profits. Like amazon Web services. Cloud computing and many more. You just need to check that weather the market cap justifies The company or not. For this, use all that old Hat ways to analyse stocks. Ratio, future potential, Warren Buffett Business Tenets etc. Happy Investing

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter