LYFT Is A Second Rate Company – And The Investment Lesson You Must Learn
It must be noted that your Chairman – always a quick study – required only 20 years to recognize how important it was to buy good businesses. In the interim, I searched for “bargains” – and had the misfortune to find some. My punishment was an education in the economics of short line farm implement manufacturers, third place department stores, and New England textile manufacturers – Warren Buffett, 1987 Letter To Shareholders
In recent weeks I’ve been expounding the “perennial philosophy” of buying high quality companies and holding them for the long term. But many of us are tempted by “bargains” – stocks that look cheap but are in fact value traps.
Lyft (LYFT) is a perfect example. I’m sure there are a number of investors out there who view LYFT’s second consecutive quarterly blowup as a buying opportunity. “Look how cheap it is!” “It will come back!” they tell themselves.
But the truth is that LYFT is a second rate business in permanent decline. It will never beat Uber – or even be a viable competitor.
Learning to avoid low quality value traps and buy high quality leaders is a lesson all successful investors must learn – many of us the hard way. I’m just trying to save you time.
Also see: “Dead-LYFT And The Perils of 2nd Rate Companies”, Top Gun Financial, 2/10/23