1. Actual investors look to the future. Not the past:

    Assuming that companies’ past performance will continue takes no account of how the world is changing.


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  2. As ‘the future’ will be unrecognisably different from the present, it’s better to invest in a business because of what it can become, not because of how profitable it is now. Many investors avoid yet-to-be profitable companies for fear of looking stupid if they never generate free cash. We care more about how a company might make money in the future.