There’s a reason I drive Toyota and Lexus vehicles…
Because their president actually has some common sense. He understood that the market place was not ready to go exclusively to electric vehicles.
Here’s what I said almost exactly two years ago about it…
And now — as EVs pile up unsold on car lots and car manufacturers have to report huge losses due to catering to a market that barely exists — people are finally waking up to that reality.
As an investor, Charles has been ringing the bell to invest in oil stocks for the last two years.
Because EV stocks, well they didn’t meet his Alpha criteria. Here’s why he’s never recommended an EV startup…
Director, Prosperity Research
EV Hype vs. Reality: Why Profitable Businesses Always Win
The pitch was simple: EVs were the future, gas-powered automobiles would disappear by 2030 and the time to invest was now.
These emails pointed to the Biden administration’s push for EVs and claimed that start-up stocks in the sector were destined to soar.
Companies like Lucid Group, Fisker and Rivian Automotive rushed to go public, and investors snapped up shares in a frenzy.
Wall Street called EVs the next “Big Tech disruptor.”
But I didn’t recommend any of those IPOs to my readers.
After more than 40 years on Wall Street, I’ve seen how these hype cycles end.
Fast-forward to today and the EV craze has burned many investors.
Wall Street insiders and stock promoters made billions, while everyday investors were left holding the bag — and most lost their money.
The Reality Behind the Hype
Many of these EV stocks are now worthless.
Here’s what four decades on Wall Street taught me: a stock is a piece of a business and over time, its price will follow the business’s performance.
These companies weren’t burning fossil fuels — they were burning cash. And the outcome? Bankruptcy.
During the EV frenzy, instead of chasing hype, I recommended financially sound companies like:
- The Progressive Corp. (up over 200%)
- Apollo Global Management (up more than 150%)
- Taiwan Semiconductor (up 140%)
Investors could have avoided losing money by asking one simple question: Is the business profitable?
If the answer is no, buying the stock is like buying a lottery ticket. And buying lottery tickets is the quickest way to go broke.
When you invest based on a story instead of the business, it rarely ends well.
I’ve never figured out how to value a company that doesn’t make money.
If you know how to do this, email me at Insider@ProsperityResearch.com.
Here’s the thing: you can’t buy a hamburger with future profits.
Companies with cash and no debt don’t go bankrupt.
That’s why I didn’t buy into the EV hype — these start-ups were more story than substance.
At the end of the day, a stock is a piece of a business. If you invest in companies that are all story and no substance, you might as well light your money on fire.
But if you focus on businesses with real profits, strong financials and less hype, you’re far more likely to succeed — and sleep better at night.
Next time you see a new “disruptive trend,” you’re told you must buy, stop and think.
No matter how exciting the technology or innovation is, if the company isn’t making money and relies on hype, avoid it like the plague.
Regards,
Charles Mizrahi
Founder, Alpha Investor