Overstock.Com Inc Stock Is the Best in Class, but Be Patient

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OSTK stock - Overstock.Com Inc Stock Is the Best in Class, but Be Patient

Source: Overstock.com

Over the past several weeks, I’ve been quite vocal on blockchain stocks. Despite my overall bullishness on blockchain technology (it will have the same effect on our society over the next 20 years that the internet had over the past 20 years), I’m largely bearish on blockchain stocks. My thesis is be patient, and then invest after the forthcoming and inevitable pop.

And although I view digital commerce retailer turned blockchain pioneer Overstock.com Inc (NASDAQ:OSTK) as the best in class of the blockchain stocks, I still think it is best to be patient when it comes to investing in OSTK stock for its potential blockchain upside.

Here’s why.

Why Patience Is Key When It Comes to Blockchain Stocks

At this point in time, blockchain stocks simply aren’t responsible investments.

There are too many. They are hardly distinguishable. And they’ve gone up far too much in far too little time. Recall the dot com bubble, which was the beginning of the internet boom. Although the internet proceeded to change the way the world operates over the subsequent 20 years, many of the stocks that boomed in the late 90’s went poof by the early 2000’s.

Same thing will happen this time around with this blockchain boom.

And even if you do happen to pick one of the long-term winners (which is very unlikely), investing now still doesn’t make much sense. Just look at Amazon.com, Inc. (NASDAQ:AMZN). Amazon was a $90 stock at the peak of the dot com bubble. A decade later, it was also a $90 stock.

Why rush into the blockchain craze now? Don’t. Be patient. Let the mania go manic, let the pop happen, let the weeding happen, let the losers fall out, let the winners emerge and then invest in those guys

Why Patience Is Also Key with OSTK stock

OSTK stock is a little bit different than other blockchain stocks because it is somewhat distinguishable as a leader in the field.

These guys have been all over blockchain for a while. Back in 2014, Overstock became the first digital retailer to accept bitcoin for payments. Around the same time, they also started Medici Ventures, which is focused on investing in emerging crypto-industries.

From this standpoint, Overstock isn’t just another company jumping into the blockchain craze. They aren’t a 130 year old camera company trying to compensate for missing the boat on the digital camera revolution. Nor have they pivoted from making iced teas to investing in blockchain.

No. Overstock has been in the blockchain world from the beginning. That adds more credence to the OSTK stock long-term blockchain growth narrative.

Plus, the portfolio of companies in Medici Ventures is quite compelling. Through Medici Ventures, Overstock is touching all the important areas of blockchain technology, including initial coin offerings, digital money transfers, fraud protection, and big data storage.

In this sense, there is less risk to Overstock than other blockchain stocks because it already has a portfolio of established blockchain-related companies.

But patience is still key here. As mentioned earlier, even the internet winners went bust when the dot com bubble went bust. Same will happen here. Just as the blockchain craze has created a tide that is lifting all boats, the bust will drag on all boats.

Bottom Line on OSTK Stock

Overstock is the best in class when it comes to blockchain stocks given its history in the space and its established portfolio of blockchain-related investments.

But that doesn’t exempt Overstock from the blockchain stock rule of thumb: be patient.

This could be a long-term winner, but it is best to let the blockchain weeding process happen first before jumping on the bandwagon.

As of this writing, Luke Lango did not hold a position in any of the aforementioned securities. 


Article printed from InvestorPlace Media, https://investorplace.com/2018/01/ostk-stock-be-patient/.

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