, Columnist
In Profits We Trust
Investors seeking high returns are making some bad bets on companies that have yet to show a profit.
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I was in business school during the stock market bubble, which means I've heard all the rationalizations about how unprofitable companies will eventually make money.
There were companies such as Kozmo.com, which delivered stuff via bike messenger; it was losing money on every unit, but planning to make it up in volume. (How do you scale up bike messengers?, asked a perspicacious vice president I worked for in Merrill Lynch's technology investment banking group.)