Andy Egwim passed on SpaceX's $1.75 trillion IPO despite calling it a potentially defining company. He argues that great companies don't automatically make great investments at inflated prices, citing two decades of experience and historical examples where stellar firms became poor buys for early investors caught in FOMO.
SpaceX's historic IPO is a no-no for me. Now, the valuation is reportedly approaching $1.75 trillion, and that's a trillion with a T. That's a thousand billion. Every investment platform I use seems to be emailing me again and again about it. The IPO is reportedly oversubscribed. Investors are lining up to get it. There's lots of FOMO, fear of missing out. The excitement is everywhere, and yet it's a big no-no for me. I'll tell you why. It's not because I think SpaceX will fail. It's quite the opposite. It's a fantastic company. In fact, I think SpaceX could become one of the most modern companies of our generation, our lifetime. Problem is not the company. I think the valuation is what I can't seem to swallow. After investing for more than 20 years now, I've seen that a lot of times those two things can be quite different. A great company and a great investment are not always the same. In fact, you could get like a fantastic company that is a terrible investment depending on where you invest. In fact, history has shown us plenty times when great companies became bad investments for some investors depending on when they were bought.
