Stocks I Would Never Buy for Long Term Investing (And Why)

Main Points

The presenter’s central argument is that long-term investors should focus on avoiding major mistakes rather than chasing stocks that might double or triple. He says he has invested for nearly 10 years and reports annual returns of 25%, but the subtitles do not provide a time period or independently verified performance data.

Stocks and Situations He Says He Would Avoid

• Unprofitable companies without a long track record of profitability. He argues that persistent losses may reflect weak demand, intense competition, aggressive pricing, or a flawed business model. Continued investment and capital expenditure can deepen cash burn rather than lead to a turnaround. He also highlights the opportunity cost and stress of waiting for profitability that may never arrive.

  • Examples he cites include Nikola, Ford’s electric-vehicle division, and Stellantis’ electric-car operations.
  • He acknowledges exceptions, including Spotify, Uber, and Amazon, which he says moved from years of losses toward profitability or free-cash-flow generation. He considers these exceptions, not a reliable basis for investing in the average loss-making company.

• Companies without a proven business model or record of success. He cautions against new technologies, startups, and IPOs with little history to assess. He says many companies that went public in 2020–2021 had business models that failed within 2–3 years. A longer track record—he gives 20 years as an example—can help investors evaluate management, capital allocation, debt, and business resilience.

• Fashionable or hype-driven themes. He points to cannabis stocks in 2018 and electric vehicles in 2021, as well as speculative regional market booms in Latin America or Africa, as trends that may surge and then collapse. Short-term traders may be able to exploit these moves, he says, but he would avoid them for long-term investing. He also advises ignoring meme-stock and hype episodes involving GameStop, AMC, Nokia, and Blockbuster.

• Overpriced stocks. Even a high-quality company can be a poor investment if bought at too high a valuation. He specifically flags P/E ratios of 80–90 as excessive and says a decline toward a 20–30 P/E range could materially hurt returns, even if the company performs well.

Valuation and Investment Framework

The presenter says he looks for profitable, high-margin businesses with proven business models, durable free cash flow, sound management, and a reasonable entry price. His considerations include:

• Looking for a long record of profitability and free-cash-flow generation, including resilience through difficult periods such as 2008.
• Assessing how management deploys cash through dividends, share buybacks, mergers and acquisitions, or reinvestment.
• Reviewing leverage and debt-management practices, including repayment terms, currencies, and short- versus long-term borrowing.
• Considering insider ownership and whether the company is family-controlled.
• Preferring a purchase P/E below 30; he says he would reject an idea at a P/E of 60.
• Comparing a company’s valuation with the norms of its country’s market, rather than assuming that a low P/E is automatically cheap.

As examples, he states that the S&P 500 average P/E is around 30, while China’s average is 10–15. He cautions that valuations differ between countries because of regulation, growth prospects, and politics. For example, a Colombian stock trading at a P/E of 6 should be judged against local-market comparables and company fundamentals—not assumed to be a bargain based on its multiple alone.

He says he prefers buying profitable, established businesses with temporary problems or price declines rather than speculative businesses whose future is difficult to predict.

Investments and Entities Mentioned

• Companies and stocks: Nikola; Ford; Stellantis; Spotify; Uber; Amazon; GameStop; AMC; Nokia; Blockbuster; TPL; and an IPO rendered in the subtitles as “Lindbridge” (possibly a transcription error).
• Markets and assets: Equities, IPOs, the S&P 500, and country-level equity markets including China and Colombia.
• Sectors and themes: Cannabis, electric vehicles, and speculative regional market booms in Latin America and Africa.
• Investors: Warren Buffett and Charlie Munger.

The presenter says the “Lindbridge” IPO, dated 2024 in the subtitles, was the only IPO he bought because he considered its business model similar to TPL and already proven. He also says his portfolio is public on eToro and consists of companies he describes as long-term free-cash-flow generators.

Disclosures and Cautions

The presenter promotes a coaching program that he says teaches his strategy for targeting 25% annual returns. The supplied channel disclaimer states that he does not provide personal investment advice and is not a qualified, licensed investment adviser. His return figure and other performance claims are the presenter’s claims, not independently verified in the subtitles.

Presenter/source: Christophe Nour (rendered in the subtitles as “Kristu Noor”). He also refers generally to letters from leading investors, specifically mentioning Warren Buffett and Charlie Munger.