I am not a big fan of owning stocks right now, although I do advocate the permanent portfolio, which contains 25% stocks.
One stock that is intriguing to me is Groupon. The symbol is GRPN. The stock began publicly trading back in early November. The IPO price was $20 per share. The stock price has varied quite a bit since then, but it is above $22 per share as of this writing.
For those who are not familiar with Groupon.com (like a coupon for a group), it is a website that offers great deals on different things. Oftentimes, local businesses will offer a deal through groupon as it draws awareness to its business. It may not even make any profit on the people who buy a groupon and use it, but they may get repeat business. Groupon offers many deals on things like restaurants, massages, spas, nail salons, golf lessons, boat rentals, etc. You can even buy vacation deals now.
When Groupon began being publicly traded, I read quite a few criticisms of it. I read that it was just a fad and that it was like many of the tech stocks in the late 1990’s that had a lot of buzz, but didn’t actually make any money. I also read several people saying that Groupon would fade away due to heavy competition from other sites offering similar deals.
While I am not necessarily giving a recommendation to buy the stock, I believe a lot of the criticisms are unfounded. Groupon is not at all like many of the dot com stocks of the late 90’s, as many of these companies really did make almost nothing in revenue, let alone profit. Groupon does make a lot of money. Although it has not been highly profitable yet, it is a relatively new company and I believe there is a good chance that it will become highly profitable. I personally use Groupon a lot and I know of several other people who use it. Every time someone makes a purchase for a groupon, the company makes money.
While there might be some threat of competition, Groupon has the advantage of being the first one with its foot in the door. I get emails every day from Groupon on the latest offer. I am not signed up for anything with any competitors. While I know that competitors exist, I am not even aware of most of them and I’m sure that most other people are in the same shoes.
While I’m not really into recommending individual stocks, if you are looking for a speculation, I think you could do a lot worse than something like Groupon. It is not something that you should be looking to buy and sell quickly. It is something that you should consider holding for a couple of years to see if the company can make some big money. I believe the potential is there and I don’t see any major competition yet.