In the investment world, it is said that all big companies started out as small companies. From Microsoft to Amazon, every mega-cap today was once a micro-cap, and you can bet that there were critics.
“It’s too expensive!” they’d cry.
“No one will buy that!” they’d laugh.
“It makes no sense!” they’d scream.
But year after year, to the dismay of their critics, revenues multiplied, costs were driven down and profits soared. Now, the only people laughing are those who got in early. Indeed, they are laughing all the way to the bank.
On Monday, I was invited back on The Claman Countdown (clip at bottom) to make the bullish case for one of this year’s most anticipated IPOs, Peloton. Recently, Peloton made headlines with its holiday advertisement that featured a young woman being gifted a bike for Christmas from her husband. Then, the internet did what the internet does and had its way with the commercial, calling it sexist, ageist and just outright stupid. Personally, I thought they missed the mark too.
[peloton ad meeting]
Ad Exec: A weight loss journey.
CMO: Go on…
Ad Exec: But instead of featuring actual customers who’ve transformed their lives, we hire a model already in amazing shape?
CMO: Make it happen.
[twelve hours later] pic.twitter.com/Cx56YNRrRb
— Douglas A. Boneparth (@dougboneparth) December 2, 2019
Nonetheless, I am a Peloton fan. It’s a great piece of equipment that I’ve witnessed change my wife’s life. Not only has it gotten her in great physical and mental shape, but it has also connected her to a community of professionals who share similar views on health, career and family. It’s been nothing short of amazing to watch her grow personally and professionally because of a piece of fitness equipment. While I don’t use the bike as much as she does, I find tremendous value in its convenience and content.
Just because my wife and I have had a positive experience doesn’t guarantee that Peloton will be a good investment. That’s ridiculous. But after digging through pages upon pages of research reports to prepare for Monday’s segment, I can see how its growth story needs to unfold to become a profitable business. It’s going to take a lot of hard work, a favorable economy and millions of new customers to pull off, but it’s not unreasonable to think that it can happen over the next several years. Just because its goals for growth are audacious doesn’t mean they can’t be achieved.
The same holds true for people. I believe the growth I’ve experienced over the last decade is indicative of that. I came to New York during economic free fall with no guarantee I would survive long enough to make something of myself. There was no guarantee that my relationship with Heather would work out after a terrible period of long-distance. There was also no guarantee that I would get into a good business school to acquire the professional network and credentials I so desperately needed. And there was certainly no guarantee that I would make it (let alone make my mark) in the financial services industry.
Yet, more than a decade later, I’ve made the Northeast my home. I married my best friend, and we turned our family of two into a family of four. I established multiple personal and professional networks,which have served me and my business well. I proved to everyone who laughed at me (literally) for wanting to work with Millennials and young professionals that they were wrong. Most of all, I proved to myself that if you want something badly enough, there’s nothing stopping you from making it happen.
Everyone likes a good growth story, but the ones people love the most are those that make what once seemed impossible, possible. While Peloton, and companies like it, might turn out to be nothing more than gassed up fads made popular by an over-extended consumer driven bull market, I can promise you one thing: as long as they’re around, they, like me, won’t stop trying to grow.
Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities. Investments like those mentioned in this blog and the video are subject to risk, including the loss of principal. Because investment return and principal value fluctuate, shares may be worth more or less than their original value. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results. Talk to your financial advisor before making any investing decisions.