24 Sep 2020
Aussie Tech VS American Tech
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
There is a great deal of noise and media about tech stocks which makes it difficult to know what to buy.
All investors want value but which past goes up?
Compare for example our own WAAAXN (WiseTech, Appen, Altium, Afterpay, Xero and Nearmap) against the FAANG (Facebook, Apple, Amazon, Netflix and Google) on cash revenue and valuation and the numbers could not be more startling.
The WAAAXN has been burning through investor capital for the past 5 years and not making any money while the average valuation is double the FAANG.
Click for charts.
This is not a recommendation to sell WAAAXN and buy the FAANG.
Instead it is a reminder that the price you pay when investing is what matters.
Overpay, even for a quality asset and it could be decades before you make a profit.
Benjamin Graham taught this as part of his value investing principles and the insight is to remain invested according to your appetite for volatility and when fear and panic take hold, react by buying more quality assets at discounted prices.
At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me or to call me on +61 2 9267 2322.