Tom Lee: Most Investors Underperform in Growth Investing, Emphasizes TAM Assessment

Most investors are underperforming in growth investments, with a new argument suggesting they should look at markets created by emerging technologies rather than current business operations. Tom Lee, chairman of Bitmain ($BMNR), stated that growth investors overly concentrate on the current activities of projects. PANews reported on October 18 that Lee made these remarks during an interview.

Lee said, "Most investors are achieving very poor results in growth investing." He identified as one of the biggest mistakes focusing on what a project is currently doing rather than what new technology could evolve into. To assess growth investments, he emphasized establishing a clear base case scenario first—a fundamental path among various possibilities. He stressed that investors should not only consider the services a project currently offers but also how its business scope might change with technological advancements.

Distinguishing between current business status and potential future expansion areas is key. Understanding the total addressable market (TAM), which refers to the long-term overall market size a technology or service could target, is also critical. Relying solely on current market size can overlook new technologies' expansion potential. When investors judge project value based only on current revenue or user numbers, they risk missing this opportunity.

Lee pointed out that investors often assess future opportunities by benchmarking against current markets, which may lead them to view a project's entry into new markets as similar to its existing business area, potentially undervaluing growth potential. New technologies carry uncertainty and speculative elements but can also expand existing market boundaries. He noted that investors tend to focus more on risks than the potential market opportunities these technologies could unlock.

Lee’s remarks are about evaluating business expansion potential in growth investing, not specific price or return forecasts for virtual assets. Bitmain’s official materials list Tom Lee as chairman of the board. His proposed base case scenario and TAM assessment focus on separating current business scale from technology's expansion possibilities.