While the lithium miner and pot stock craze swept the ASX and internet forums, established businesses just kept on grinding higher.
Pot stocks really started to get hot in March of 2017. Lithium miners had been on the boil for a little while before that. Yet while unwitting investors chased the boom in unproven speculative companies, a2 Milk Company Ltd (Australia) (ASX: A2M) shares rose 155%.
Even mature business Flight Centre Travel Group Ltd (ASX: FLT) has been on a tear – its shares are up 71% since March. Any of the investors looking at pot stocks or lithium miners with zero revenues could have seen that Flight Centre shares were heavily down, airfares were picking up, and the company itself had suggested a stronger second half was on the books.
Investors could have bought either company and made huge profits with close to zero risk of bankruptcy. To be sure, I think both Flight Centre and a2 are overpriced right now. But they're profitable, generating lots of cash, and they have no meaningful debt. What's more, both companies have substantial growth plans in the works and could become significantly larger in time.
For all the time, energy, and risk spent on pot stocks and lithium miners, I think investors could do a lot better just by sticking to the ASX200.
