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Klaviyo recently went public for the first time. 2022 did not have many IPOs (initial public offering) as the market was down, so I have been very happy to see companies having more faith this year and going public. That said, I normally do not invest in IPOs as a general rule as I want to wait and see where the stock ends up. Klaviyo, however, does interest me as a company. Is the stock a buy?

Klaviyo is a marketing automation platform that mostly works with SMS and email. That is what piqued my interest in this company. That is obviously a very valuable service, and a company built around this is one I like the idea of owning if I can buy it at a good price.

Klaviyo is currently trading at around an $8 billion valuation. At this valuation, one is buying this company at a price/sales ratio of 13.57. With this in mind, I believe that the company is very very overvalued. That is, of course, to be expected though as its a high growth company.

One thing that I keep seeing brought up as a negative for Klaviyo is how dependent they are on Shopify. Shopify is responsible for a lot of the company’s revenue. Investors must understand that if Shopify ever stopped working with Klaviyo that it would be a huge hit on their revenue. I’m not really worried about that though. Shopify is one of Klaviyo’s biggest investors so hurting Klaviyo would hurt them.

I personally would not buy Klaviyo at its current valuation. I think the stock will fall in the short term, and if it falls enough, I will then buy shares in the company. I hope that it does happen as I do want to buy this stock.

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I think investing is very fun, but my actual strategy is very boring. At least, it could easily be perceived as boring. Every stock I buy, for the most part, is one that I plan to hold for many years. I really don’t ever plan to sell stocks, but I will if they start trading much higher than I think they should be. The goal, however, is to never sell.

Many people claim that this is not a good strategy because without selling, the gains from a company’s increase in value is never realized. While true, I look for companies that are going to pay me cash flow. I treat investing in stocks like one would invest in farmland. If one buys a farm, they probably aren’t checking quotes for that land every day. They are running a farm to get cash flow on that land. Maybe eventually they will sell the land, but they are owning it for the cash flow. I buy businesses for cash flow. I then use that cash flow to buy more companies so that I can get even more cash flow from them.

When I look at a stock, I am not looking for something that I can flip for a higher value in a few months. I am looking for a company that I can own for decades that will steadily increase the amount of cash flow that it is paying me. Obviously, I want the company to increase in value as well over those decades, but it is not something I have any plans at all to sell.

This is my personal strategy. If I find a company trading at a good valuation that is steadily increasing their earnings per share year-over-year, I will buy that stock. I’m not saying it is the best strategy, but it is my strategy.

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I constantly see people giving advice to invest in ETFs (exchange traded funds) and not individual stocks. While I think the sentiment of this advice is good, there are a lot of ETFs out there. Some are great ones; some are terrible ones. Telling someone to “just invest in ETFs” alone is not good advice. That said, here are some ETFs that I do like.

1. SFY – SoFi Select 500 ETF

SFY is a S&P 500 ETF from SoFi. The reason I really like this ETF compared to other S&P 500 ETFs (although I do also like VOO) is because it has an expense ratio of 0. The expense ratio is the management fee that a fund’s creator takes. SFY’s is 0.

2. SCHD Schwab U.S. Dividend ETF

I believe that SCHD is likely the best dividend ETF out there. Since its creation in 2011, it has outperformed the S&P 500. Now, past performance does not necessarily equal future performance, but the fund has performed pretty amazingly.

3. VUG – Vanguard Growth ETF

This fund by Vanguard invests into growth stocks. Most of these stocks are very large cap U.S. companies. I’m a pretty optimistic investor which is a big reason that I really like this fund.

4. VFH Financials ETF

This ETF invests in the financial sector. I like this ETF because I want exposure to this sector without having to pick individual companies in it.

These are some of the ETFs I am a fan of.

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AMC Entertainment is down 42.79% over the last 5 days. This is largely due to them announcing that they would be selling up to 40 million new shares to raise money. This is a big deal to shareholders as it dilutes their ownership level of the company. When a company issues more shares to raise money, the amount of shares that an investor holds remains the same. This means that the shareholders now own less of the company than they did before.

Shareholders now have a decision to make. They have to decide if they want to sell their shares or hold their shares and watch their ownership level of the company shrink. Obviously, a lot of shareholders are choosing the first option. This is, however, not the first time that this has happened. AMC has already sold millions of shares in recent years. They have, unfortunately, used up that cash and are now selling more.

It is not uncommon for companies to issue new shares to raise money. It is also not always a bad thing either. Many high growth companies operate at a loss as they are reinvesting all their revenue into the business to keep growing. This can be a good thing as the company can now reinvest that new cash back into the business to grow even faster. The investor’s shares will then become more valuable as they now own a higher revenue producing company.

AMC now trades at a market cap of $1.14 billion at time of writing.

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