The worst bear thesis: X will crush Y because X.marketCap >Y.marketCap
Hello you, yes you. You just found someone on the internet pitching a really interesting small/mid cap company growing fast and with a great management team. Everything looks good and the author seems to really undertand the case. But you know better, you know that there is ONE thing that the author doesn't know about that you do. You have a massive edge in the markets since you know about this company called Amazon.com and you can't WAIT to see the look on the authors face when they realize that everything they have written on the smaller company is completely invalid, mundane nonsense, because obviously, it is only a matter of time before Amazon will come in and crush them.
But wait. Before you drop your brilliant and extremely original hypothesis that writes out something like:
"Hey jackass, nice job wasting your time writing this bullshit since Amazon will crush them later on anyway."
Maybe wait a second and consider that history has not been very kind to such predictions. Amazon was supposed to crush $MDB with their DynamoDB noSQL database What has MDB stock done since? It has almost gone up 6 times.
Another great example is MTCH group, which owns the Tinder app. We had some not-so brilliant Seeking Alpha hit pieces (a common theme). Match group is up 4.41 times in just 2 years since the worries emerged.
Since we all love Tesla, lets do one more. A common thesis among Teslaq members, (a cultish communnity that hates Elon musk) was the Porsche would crush Tesla since their Taycan was supposedly so much better than the Model S. Tesla stock is up 24 times since.
I could go on and on. The same bear thesis has been used against almost every tech stock (probably them all). At some point or another. Usually the smaller company with the first mover advantage, and a strong network of happy customers already built out always wins out in the end. The copycats, whether they are big or small companies never pose an existential threat. That's not to say that they do not matter, of course it matters if Amazon moves into your vertical. But it's not a valid bear thesis.
Cautious investing to all. 🍋