John Del Vecchio and Brad Lamensdorf on unprofitable companies outperforming the market in 2020

The stock market remains on fire...  We are now in full pause mode.  One of the most worrisome factors is the quality of the rally recently.  The less profit a company makes and the more cash it burns, the better is does.  Stocks losing money and burning cash are up over 40% year to date.  Meanwhile, profitable, cash generating companies are under-performing the Russell 3000 benchmark.  We know from our own testing that while money losing, cash burning companies can have periods of big runs, it’s not a sustainable area of the market for investment.

~ John Del Vecchio and Brad Lamensdorf, "Profits? We Don't Need No Stinkin' Profits!," LMTR.com, December 14, 2020