Those that have studied mania’s or bubbles know the common theme that logic, common sense and discipline are thrown out the window. It’s all about investor sentiment (emotion) and the fear of missing out. They happen regularly with investments and sadly, all end the same way ….. the majority get taken to the cleaners. The most difficult thing about them is not that it is hard to see the bubble, but rather when it will burst. It will pop … they always do we just never know when.
The latest example – Beyond Meat
Beyond Meat’s market cap just passed that of Conagra’s …
Those that aren’t familiar with Conagra, they
· Were founded in 1919
· Make many food products under the brands Duncan Hines, Hunts, Slim Jim, Orville Redenbacher, Healthy Choice, PAM, Birds Eye, Earth Balance, etc.
· Employ 18,000 people
· Generated $9.5 Billion in revenue
· Founded in 2009
· Create fake meat products
· Employ 383 people
· Generated $95 Million revenue
Beyond Meat is now worth more than the market value of Shake Shack, Wendy’s, Jack in the Box, Red Robin, Habit Burger, and Good Times … combined
This one too, will end badly. I am happy for those that caught and continue to ride the euphoric wave higher, I just hope you have a management plan for when the party ends. At some point in the future it will be worth circling back around and seeing when and where it lands. Will we be able to add beyond meat to the forgotten pile of disasters of the past such as dot com stocks, beany babies, tulips, 2007 US real estate market and many, many others?