Learning From The Ups And Downs Of Bukalapak's Stock, Retail Investors Must Understand This: Buy A Nominal Amount That We Are Prepared With The Risk

Illustration. (Photo: Doc. Antara)

JAKARTA - Emtrade founder and CEO Ellen May advises stock investors, especially retail investors, to understand the risks and benefits of investing in unicorn stocks or digital technology companies with a valuation of more than one billion US dollars or that have different characteristics from conventional companies.

According to Ellen, investing in unicorn stocks carries a high risk and high profit potential. However, investors must be able to see how the business prospects, market share, or digital sustainability are because technology is not short-term but long-term.

"When you want to buy unicorn shares, you have to really understand the reason for buying it. It can be technical or fundamental reasons," said Ellen in her statement, quoted from Antara, Thursday, August 26.

Ellen said, if you don't understand the fundamentals, at least investors can follow the upward price trend technically and limit the risk when the price drops. Investors must adhere to the main principle of "Buy a nominal amount that we are prepared to risk".

"Because both digital and non-digital stocks, old economy and new economy stocks, all contain fluctuation risk," said Ellen.

Ellen also shared tips on valuing shares provided through Emtrade. First, the way technology stocks are valued is very different from conventional companies. Investors cannot see the ratio of stock prices to company profits or the price to earnings ratio (PER) and the ratio of stock prices to the company's book value or price to book value (PBV).

For technology companies, investors should be able to look at market capitalization (market cap), market share, or other metrics and compare them to technology stocks that have been listed in the United States or other parts of the world.

Meanwhile, Director of PT Anugerah Mega Investama Hans Kwee said investors should pay attention to the company's prospects in the future if they want to buy unicorn shares.

According to Hans, investors must realize that unicorn companies are not companies that make profits instantly and quickly. He gave an example of digital companies in the United States taking decades to make a profit.

"Investors must be rational in making decisions. We must be able to see the prospects in the future whether this unicorn company will become a market leader or not. Because, out of 5-6 similar companies, only one will be the winner. If we invest in technology companies, we should see it as a long-term investment," said Hans.