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Top five worst stocks ever welcoming guys i am jeremy this is a financial education channel in today we’re talking about top five worst stocks since i’ve been invested there’s two requirements for today’s video one that’s got to be stock set since i started investing stocks that i saw and they were so overvalued and i saw the trend coming and i was just looking
At him i’m like this tuck is so far overvalued guys so that’s the first one there’s gotta be more stock set since i started investing i saw the other thing i did for this is i made sure they’re all popular well-known companies all five of these stocks are they’re not some obscure stocks these are stocks that you guys have probably know of and i’ve heard of and
What not to achieve in today’s videos basically that you guys can spot trends in the future because a lot of these trends that these five stocks had a lot of stocks today have some of these trends okay or or are gonna have some of these trends in the future and you’re going to be looking into a company that’s got some of these exact same trends going on that these
Five stocks had and maybes all five of these stocks have fallen massively since they went up really high guys so hope you enjoy this today make sure after today’s videos over you click the very first link in the description that’s to join my exclusive private stock market membership group we are at ninety nine members you have a chance to be member one hundred
Guys that is really cool we’re about to hit a hundred members on their neck that group goes into all stocks on buying and selling in why stocks i’m looking at entry levels i’m looking at entry prices i’m looking at exit prices i’m looking at as well as also it has a 12-part full part stock options course which every single investor out there needs to know stock
Options guys so make sure you join there after today’s videos over let’s get into this alright guys coming in at number five coming in at number five is a very popular fast casual restaurant chain one of the hottest stocks going into 2014 it was one of the hottest restaurant stocks i’ve ever seen certainly in my time in possibly ever guys this was a company that
Was trading in the tens of billions of dollars as far as the market cap went they were just growing and growing their burritos are massive and what is it chipotle coming in at number five guys is cheap poorly they’re worse this stock was set up for failure chipotle was set up for failure here at number five guys the issue with chipotle was was this was a restaurant
Chain okay a fast-casual want to be mexican you know restaurant chain well the hottest restaurant chain out there okay and the issue was this company was so far overvalued as far as the p/e ratios went for this company this stock was priced to perfection okay this stock was priced to perfection they had unreal you know comp store sales they were growing on four
Six eight ten percent comp store sales they were amazing revenues were exploding profits were going up but they weren’t going up at a ridiculous rate okay if you really look at chipotle’s profits compared to the revenue the revenue was actually much more impressive and the comp store sales were actually much more impressive than the bottom line that’s because
They were expanding so fast or opened up a lot of restaurants and whatnot all right so this was such a hot chain and they had bad other businesses they were kind of possibly going into they had something called chop shop which was kind of like a chipotle but for asian food okay so it looked like that could be maybe the next big thing maybe they could have some day
A thousand of those type of restaurants right and it could be a massive goliath company kind of like a young brands but for a little higher quality food right yum brands by the way they own chains like taco bell/pizza hut kfc brands like that so then it almost look like chipotle could be the next one of those just a little bit higher tier food you know and this
Stock was set up price to perfection guys the p/e was astronomical in this company and then what happened the whole e.coli situation happened they had another norovirus or something going on there it was staying after thing going wrong with chipotle and this stock was over $700 and now this stock you know less than three years later is trading somewhere around two
Hundred and seventy-five dollars geyser stock was over seven hundred bucks now it’s around the two hundred and seventy two hundred seventy five dollar stock chipotle is and it’s just it was up stock that was literally priced to perfection in the restaurant space since that time they had that a disaster that happened in chipotle they’ve done in my opinion a pretty
Good job as far as saving the whole company as far as not going under or something like that they actually did a really great job as far as that went but they’ve also exited the the chop house business and they kind of have a few other businesses they might try to get into a little pizza game a little burger game but i right now it just looks like chipotle is just
Kind of the way they got a focus right now and they’ve also cut down on the amount of restaurants they’re gonna be opening now so it’s just bad news and bad news around chipotle right now and it’s just a stock that i saw that was just massively overpriced because of how many years it would take them to get that pe to a realistic range it would have took them at least
Five to ten years to get that pe to a realistic range if that stock price stayed the same because their net income was way lagging compared to where they’re at guys and so you got to always be paranoid if that is if you’re in a restaurant chain that’s got a p/e in let’s say the high you know 80s 90s or even the hundreds that chipotle has at some points right in the
Hundreds you’ve got to be prepared that man if something happens like that this stock could be you know literally cut in half if not cut by 75% overnight guys and that’s pretty much what’s happened in chipotle here that’s why it comes in at number five does anybody remember a super popular game called farmville what about mafia wars well in the lathe let’s say 2007
2008 2009 maybe even in the 2010 if you were on facebook i can almost guarantee you you know about farm bill you maybe played it you know about mafia wars you maybe played it you know about those games they were all over facebook and you’d get a thousand requests a day from people saying hey i need a cow or something like that on this farmville game guys it was
Blown up it was raking in the revenue and the owner of that company they went public around 2011 i was 2010-2011 and their name was zinga zinga and this was a stock that priced of ipo was somewhere around i believe it was $15 right now the stock trades in the threes all right huge difference in the business this is a stock that you traded at a ridiculous valuation
Compared to the amount of money they were bringing in but it wasn’t just that in this particular time when they were going public – those are natives like you know the said it was around i think 2011 they went public right that was a time when we were shifting more from pcs mobile and it was like okay how is this gonna change things and facebook was changing a lot
At that time and they were changing more to a mobile format because people were starting to buy a lot of smart phones right smart phones are starting to be used more and more and this was totally changing the way people interactive we’re from facebook just being on a pc and maybe playing a farmville game on there to also now they were not ok and so it was up to
Zynga to kind to change the business into a mobile format and trying to get apps and whatnot and they absolutely failed at that they absolutely failed they still to this day do not even have a big-time game in the app works they lost that war to a company that came out of nowhere which was supercell they started a game called clash of clans then they started a
Boom beach they got several games clash royale and they also lost to king digital which took a ton of its female customers away by a game called candy crush ok and several other games they had but but candy crush was the main one and so those type of companies ended up dominating the mobile apps while zynga which was kind of thought to be maybe they could be the
The future game leader out there they were kind of forgotten about and that’s why the headstock still to this day is somewhere around a three dollar stock they made so much money and ipo that it was literally billions of dollars they got in the ipo that that has literally funded the business to this day and they’re still able to stay afloat mainly because of all
The proceeds they got from that huge ipo because when they went and did the ipo it was like the biggest game and i believe it was the biggest gaming ipo ever in the history guys so that’s just a stock you’ve got to watch out for that guys when there’s a huge trend shift that’s happening there you got a wunderkind this company change with the trend which was ok
We’re going from pcs and also facebook’s kind of changing the way they’re doing things a little bit now we’re going to a more apps dominated and dominated world how are they going to be able to you know ship that way and some investors thought they could and they were wrong unfortunately some investors didn’t and they stayed away from zynga guys and that’s why it
Comes in at number four man apple’s a hard company to compete with this next one guys coming in here at number three this one one of the main reasons this one has gone down so much and if from where i was trading it is honestly because of apple and samsung and you know whenever apple or samsung comes in your space i think you just have to pay attention to that
Guys there are very hard companies to be specifically apple in which company am i talking about i’m talking about fitbit guys we’re talking about fitbit this was a company that ip owed it was somewhere around it was i peeled in the 20s shot up within probably six months to a year after that it was in the 50s right was in the 50s and this was just a couple years ago
Now the stocks is about a $6 stock okay so went from $50 to $6 now in literally a couple years time now what fitbit had going wrong for it it actually never had a super astronomical the high p/e okay it did have a high p/e as far as relative to the market but it wasn’t like oh my gosh i was trading in the thousands or the hundreds or something like that okay so
That actually wasn’t the issue the issue with fitbit came down to who was coming in their space okay and who came in their space apple a few years ago apple launched the apple watch okay that did many of the same things a fitbit did but also it did even more okay and apple has the brand power that they can just when they really want to focus on something it’s very
Hard to compete with them and that’s the issue fitbit’s had and since then fitbit sales have been declining also they’ve had to take a lot of write offs at retailers and things like that guys so they they capitalize on the huge wearable trends but now they’re kind of facing the brunt of all the big dogs wanting to come in and take some business out of that which is
Samsung because samsung has several different wearables and an apple with how much apple has focused on the apple watch of late guys and i can honestly tell you at least in my own personal life i know way more people that wear and actually have an apple watch than they wear a fitbit and some of them used to have fitbit’s but now they wear an apple watch full-time
Guys so for that reason fitbit comes here at number three guys they just had huge competitors coming to their space and it’s hard to compete with those guys when you’re a smaller company oh boy guys be ready to have your socks knocked off are you ready for stock number two well here’s something for you it’s the most talked-about stock in this channels history okay
Stock i have a big position in nowadays okay have you guess what stock it is yeah yes you probably have guessed it go pro second worst stock i have ever seen in my time of investing okay this stock ipo de round $24 okay four months later yes four months later this stock was trading for $98 a share $98 a share i remember they would talk about it almost every day on
Cnbc i friends i would talk about in what huh and i was like what this stock is trading at $98 did anybody have any lou like what what’s going on with this business at that time gopro had one one major product they weren’t in the drone space they weren’t in the virtual reality space they didn’t have nearly as many accessories as they do nowadays they didn’t have
A complete software solution they basically sold action cameras and this company was trading at 98 yes 98 dollars a share it had over well over triple almost quadrupled from where an ipo that guys quadrupled on real and i was like is this seriously going on is this seriously going on and it was and what investors i think got caught up and that we’re still buying
It up in those 70s 80s $90 range and there was ton of buyers still even in the 60s when it dropped back down right what investors kind of were hopeful of is that they can maybe turn into a media company it’s a little harder to do than just you know going into a media company right especially when you’re a product focused company and what happened with gopro is
They did not continue to innovate fast enough and they went a whole christmas in 2015 without launching a flagship product which is an absolute no-no in the electronics space you’ve got to launch a flagship product every single year there’s a reason apple comes out with new iphones every single year the reason samsung comes out with new galaxy phones every single
Year this apple ever go one year without releasing a new iphone nope does the samsung ever go one year without releasing a new iphone nope does dji ever go one year without releasing new drone no gopro went off full year without releasing a camera and that took sales way down in 2015 which the stock just cratered got it down and now we’re out of stock that’s in
The nine dollar range from $98 it’s one of the literally a second worst stock i’ve ever seen as far as what were people thinking when they were buying in at those those 60 70 90 dollars guys could you imagine the one that actually bought at the highs at 98 dollars like like what were you thinking at that moment it’s just it was a one-trick pony and and i don’t
Know what people were hopeful of but it was honestly it’s one of the worst stocks i’ve ever seen in my time and i’m i probably won’t see even very many stocks that bad ever again all right guys the time has come for me to reveal the number one worst stock i have ever seen in my time number one worst stock this was a stock i held at one point i held this stock
I bought it originally it was somewhere around the $8 range okay i held it for roughly a year never made any money out of it sold out of the position okay over the next year and a half that stock went from around an $8 stock where i sold out i’d never made any money unfortunately in a year and a half time it went up to 43 dollars a share 43 dollars a share guys
First off i was it’s probably the worst sell i’ve ever made because of how much money i could have made in that bond right this stock okay is now a $5 stock this is now a $5 stock it was $43 i believe was 2013 okay and that stock is pandora pandora the radio music app that i actually still use this day every once in a while i’m sure a lot of you guys probably use
Pandora out there right pandora oh my gosh like i cannot believe this was training at $43 a share in 2013 because what you could have seen at that time was when spotify was gaining more and more popularity and it was clear that streaming was kind of going to be the future okay and you apple there was a lot of rumors about apple was gonna be entering the space
Probably within the next year and to which eventually they ended up doing okay and there was rumors at a lot of other places we’re going to start up streaming services which title did and you had all these money this influx of money coming into a space that was crowding out endure a lot of people that were pinned or users like myself actually ended up going
Onto one of these streaming services and then use app and or far in far less okay which is what ended up happening me i’m an apple music user now and i hardly ever use pandora it’s pretty rare i probably use pandora for maybe one hour a week or two hours a week when it used to use it for literally probably fifteen to twenty hours a week of listening time that’s a
Dramatic drop-off in the amount of ads and that happened to furtive pandora as a company but that’s not just the biggest thing that pandora had the biggest thing is has to do with actually music royalty rates okay so every four years these rates are that that pandora has to pay per song played right they generally go up in up depending on how pandora’s business
Is going so these rates names are gonna just keep going up as pandora brings in more money which then makes pandora in a situation where it’s like they can never make a profit and if they can never make a profit there and they keep taking losses they’re gonna eventually go out of business guys and now we see pandora down here as a $5 stock and it’s like what is
A future of pandora the future of pandora i’m not i’m not 100% sure if they can even i’m not even i wouldn’t even say i’m not even 50% sure if they’ll even be around a few years from now unless they get bought out by another company because of the losses they need to take and i don’t know if i can ever see them making a profit with all these big dogs like spotify
And specifically apple music okay and you got google doing their thing in the music game with youtube and youtube bread and a lot of different things google’s go doing with music it’s hard for me to see a future for pandora out there unless they get acquired by somebody that can put the money into pandora that can say okay well take losses for the next 5 10 years
And then we’ll start getting games after that i’m not sure that can be there so we’re seeing pandora at a $43 stock was just mind-blowing to me because it was really at that time you could really start seeing that there’s all this stuff coming back when i was invest in it it was such a low price stock at $8 a share and it wasn’t clear if streaming was the future
At that time by the next year and a half it was kind of clear that streaming was gonna be the future in pandora might not be the future of the streaming it might actually be apple music and spotify and some of these other guys which is how it played out i hope you guys enjoyed this video so much today i hope this helps you guys out immensely as far as seeing the
Trends in the future don’t forget click that first link in the description you have a chance to be member 100 over there guys in the exclusive group i would love to have you there thank you for watching guys and have a great day
Transcribed from video
Top 5 Worst Stocks Ever! By Financial Education