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Investing legend Charles Schwab, founder and chairman of his namesake brokerage firm, said he would stay away from money-losing companies going public.

“I would never buy a company like that that has huge losses and no sight ahead of you [about] how you are going to make money,” Schwab said in an interview with CNBC’s Bob Pisani.

“You want to buy companies that have great values. That means number one they have to be growing in revenue and they have to be making money. Pretty simple formula and a lot of these companies just don’t make money yet,” Schwab said.

This year’s initial public offerings have been the least profitable of any year since the tech bubble. Uber went public in May, and reported a $1.8 billion loss ahead of its public debut. Lyft posted a 2018 loss of $900 million ahead of its March IPO. Both stocks are down more than 25% since their IPO date. WeWork also suffered a more than $900 million loss for the first six months of 2019 and pulled its IPO last week.

“Some of the IPOs we’ve seen with very large valuations based upon no earnings. That’s sort of an obvious place to look at [for potential bubbles]. You can avoid buying into those things and wait ’til they start making money,” Schwab said.

The hyper growth of those start-ups had led to extreme valuations in the private markets, but this year’s IPO market has served as a rude awakening as those companies’ market cap in the public markets has fallen way below their private valuations. Uber now has a market cap of about $51 billion, below its private valuation of about $76 billion just before its IPO in May.

CNBC’s Jim Cramer believes those IPOs pose a greater risk to the stock market than the U.S.-China trade war.

“Just say no to IPO,” Cramer said on Monday. “The market can’t handle another IPO. There’s just no money around.”

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