Sea Limited is Doomed
This morning, I was engrossed in reading “The Buffettology Workbook” by my investment mentor, Mary Buffett Interestingly, her insights seem to resonate with what’s unfolding at $Sea (SE.US)$
According to Mary, Warren Buffett typically avoids investing in commodity type of business businesses. But how can you identify one? Mary’s take on this is quite intuitive: “Absence of any brand name loyalty. If the brand name of the product you just bought doesn’t mean a lot, you can bet you are dealing with a commodity type business.”
She goes on to explain that even retailers handling commodity products can establish a brand identity through good service and fair pricing, which may keep customers coming back. Yet, these businesses heavily rely on high sales turnover to offset the thin profit margins associated with commodities.
This scenario mirrors the trajectory of Shopee. Although we are familiar with the Shopee brand. We have no consumer loyalty to the platform. We as consumers, will just go to where the discounts are greater.
From my perspective, Sea Limited is rife with uncertainties and risks. While its stock price has taken a considerable hit, further declines are possible if business performance continues to falter. Personally, I’d opt to invest my funds in a safer, proven venture that offers reliable and substantial returns. 😊
For my full investment thoughts behind Sea Limited, check out my Blog post here. Follow my telegram for more insights too! Arigato Investor ありがとう
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