like Lyft, WeWork, and Uber, make sure you understand the indexes behind your index funds . Specifically, steer clear of the widely held Russell index funds, which indiscriminately hold all large companies. Instead, focus on indexes with qualitative and quantitative screening criteria – like the S&P 500. Without taking these simple precautions, Lyft, Uber, and WeWork will almost certainly be making their way to a retirement account near you. It’s a scary proposition... because Ben Graham was right... eventually , the markets will figure things out. In turn, shares of these companies will tank. Remember... the last time Masa went all-in on technology companies, he personally lost $70 billion. If you’re not careful, this time it could be you left holding the bag. Without taking these simple precautions, Lyft, Uber, and WeWork will almost certainly be making their way to a retirement account near you. Bryan Beach is a former “Big Four” auditor and a CPAwho holds bachelor’s and master’s degrees in Business and Accounting. He spent six years in public accounting, and then a number of years as a controller and director of publicly held software companies. Today, he is the editor and analyst of an advisory service focused on small-cap value investing.
If you think that the market is too efficient to allow this to happen, you’re wrong...
demonstrate that Masa and other early backers could get close to those SoftBank- pegged prices. If you think that the market is too efficient to allow this to happen, you’re wrong ... Masa’s privately funded valuation fallacies are already infiltrating the New York Stock Exchange. Last May, Masa committed $2.5 billion in cash to car and truck giant General Motors’ (GM) self-driving division at a valuation of $12 billion. Almost immediately, GM shares shot up 20%. A Deutsche Bank analyst concluded that the business may be worth $30 billion – and GM shares could double. In other words, the public markets pinned GM’s stock to Masa’s valuation fallacy . Now, I need to warn you... You've already been inundated with stories of Uber's IPO. I'd tell you to avoid the shares, but if you're not paying attention, you won't be able to. With Masa-approved valuations of $70 billion and $45 billion, respectively, both Uber and WeWork will be force-fed into dozens of the index funds that make up America's retirement savings accounts. Thankfully, the S&P 500 Index includes subjective criteria that will keep both Uber and WeWork out. But behemoths like the Russell 3000 Index contain no such protections. To avoid exposure to ticking time bombs
American Consequences
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