Why being profitable is important (a response against the video)

in #economics5 years ago


Why do think investors invest in a stock? Just for trading? If you, as an investor, invest in a stock that's not profitable, while ignoring the profitable ones, that's the dumbest thing you'd ever do. By, being profitable, you make sure that investors keep investing, so that you can redeploy that capital to fund future projects. Not only that, if you're profitable, it means that your customers value your products much more than the non-profitable ones and are willing to pay extra. That's a feedback that your investments, as a company, are in the right direction. If you're not able to charge as much for your products, that they're profitable enough, it means that your investments are bad. So, yes, I do think that Amazon investors are dumb, or at best, too optimistic, that Amazon is going to be profitable in the future, when it takes away 100% of the marketshare, in it's quest to be profitable. To conclude, Buffett is way better than Jeff Bezos, despite his drawbacks of being good friends with Bill Gates.