Have Investors Missed The Boat on Lemonade Or Should They Invest?

Let’s talk about Lemonade (NYSE: LMND). This recent addition to the MyWallSt shortlist is an insurance company that operates in the U.S., Germany, Netherlands, and France, using chatbots and AI. One of the most successful IPOs of 2020, Lemonade debuted on July 1 and by New Year’s Eve, it had risen close to 350%, including a 76.8% jump in December alone.

This week, our friends at The Motley Fool appointed it as their January pick of the month, sending shares up nearly 28% — phew.

If you haven’t invested in Lemonade yet, then I’m sure that a feeling of ‘missing the boat’ is beginning to settle in right now. Surely there’s no point in buying into Lemonade now? Surely the only way is down?

“Have I missed the boat or not?”

There are numerous examples of investments out there that could have been ignored due to thinking one “missed the boat”. As Peter Lynch said:

“You could have bought Walmart 10 years after it went public and made 35 times your money”. 

That’s not all:

• If you had invested in Amazon’s IPO, you’d be sitting on gains of almost 23,000% by January 1, 2014 — accounting for stock splits. Surely it couldn’t go any higher? Well, if you’d invested in Amazon on January 1, 2014, you’d be up another 700% in just 8 years and own part of one of the world’s most influential businesses. 
• If you’d invested in Netflix at its IPO, by January 1, 2014, you’d be enjoying gains of almost 4,400%. Once more, competition is rising, surely it can’t go any higher? Wrong again; if you’d invested in Netflix on January 1, 2014, you’d be up another 850% in just 8 years and.
• Hell, remember the scene from ‘Forrest Gump’ where his business partner invested in a “fruit company or somethin'”, well that was Apple, and Forrest was set for life, and that was back in 1994, 14 years after Apple IPO’d. 

You’re probably getting the point, right?  

Now, Lemonade may not be the next Amazon, Netflix, or Apple, but it is very early days. In fact, if you had ignored Lemonade when we added to MyWallSt in November and watched it run up over 100% through mid-December, you’d be forgiven for saying, “well, I’ve missed that boat.” In fact, had you nabbed a piece less than a month ago, you’d still be up more than 55%. 

Investing isn’t always easy, but sometimes it is. However, fighting that feeling of missing the boat is tough, and can often hold you back. It’s a trap. Great businesses will keep surprising people for decades. 

In the non-directly quoted words of our Head Analyst Rory Carron, because I’m not sure who he stole this quote from: 

“If a company is the next big thing, you only need a small piece. If it’s not, then you’ll be glad you only bought a small piece.”

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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.