I recently started a thread of discussion regarding why I avoid companies that are unprofitable. The topic is fairly long so I am breaking it up into several posts. You can see the first posting here.
There are times that you will want to invest in unprofitable companies. However, this has to be done carefully and with a small portion of your investment portfolio, perhaps 10%. For this 10% of your portfolio, you can invest in more speculative offerings. Some speculative offerings such as high-tech startups or biomedical startups typically have a fairly long run of being unprofitable as they work through their startup issues.
