Stock market Saturday: my biggest stock investment (so far) this year – Peloton

Peloton

Before I do a deeper dive here let me give a quick disclaimer for those just joining me. I’m not a big stock market investor, the vast majority of my investment dollars go into domain names. For the last thirteen years I’ve seen such a solid ROI on domain names that I’m fairly certain it will be my primary investment vehicle for decades to come.

That being said, I do want to be somewhat diversified and the stock market is one way I’m doing that. Last but not least, not only am I not a stock market expert or guru, I wouldn’t even classify myself as an intermediate investor in the stock market. I’m a total newbie and I’m also not putting much time in to become an expert so take my advice for what it’s worth!

Okay, now onto the investment I’ve put the most money into in 2020 – Peloton. Why am I so bullish on Peloton? Here’s why in three bullet points:

  • With gyms closed more and more people are looking at establishing home workout routines, Peloton has quickly become the market leader. I think this “new normal” will cause people to create new habits for years to come and Peloton will be the key player here.
  • Peloton has a 93% retention rate for their SaaS service, this is a big deal IMHO
  • The major issue that people cite about Peloton is the high price of the bike. With a new lower-cost bike coming out as early as next week I think Peloton’s market is going to grow exponentially.

I’m a big fan of SaaS, apart from running a SaaS company myself I also really like companies that can deliver incremental revenue with 1’s and 0’s vs. physical product. While Peloton does have a physical product, it’s not a product I see having a lot of complicated issues like a car where there are a zillion little things that could break.

As for the price I bought Peloton at $71.34/share and as of me writing this post I’m up 13%. While I did put a good chunk of change into Peloton, if it went to zero, everything would be a-okay and I can’t stress enough, whether domains or stocks, nobody should put in money they aren’t okay losing.

What do you think about Peloton?

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