Working on diversifying my portfolio and reducing my exposure to energy. I'm looking at building positions in these companies to compliment what I already have: LinkedIn Ralph Lauren Allergan The Blackstone Group Monsanto FiatChrysler Visa Procter & Gamble I'd especially appreciate comments on LinkedIn, or if you don't like LinkedIn, a suggestion for a tech stock.
I avoided all of those 3 when I decided to build my portfolio. GOOG has hurt me this past month. XOP has luckily offset it for me. I bought LNKD at 107 and sold it at 117, I think it is too risky to hold before it reports its earnings. I need AMZN and FB to do well on their earnings....
Yeah it depends on when you bought in and what date. CMG I wanted to let at least one quarter pass after all this E Coli nonsense, AAPL I was worried about phone sales decreasing and the price point for AAPL being high, MSFT - I've just never liked the company that much. I think now is a good time to dip buy AAPL, CMG, or GOOG though.
FB, AMZN, GOOGL, TSLA or FAGT for short I don't really like AAPL or NFLX. Decelerating growth and too many competitors. I also don't like buying a stock just because it is "cheap". The efficient market theory does not work 100% of the time, but for the vast majority of the time it is true. In the case of a bubble or liquidity induced crash there can be temporary opportunities where the market gets it wrong. But if a stock price has been steady for a long time, either too "expensive" or too "cheap", mostly likely the market has already factored in everything and it is the observer who is wrong. In my experience most stocks who get too "cheap" are either shrinking or going out of business.
AMZN and LNKD killed it for me today, but freaking the rest of the market freaked out due to Icahn saying he doesnt hold AAPL shares anymore.
When Icahn first started getting in AAPL a few years ago I was telling people in this thread that AAPL might be one of the worst investments for the next 10 years. Obviously I was way too early, it got a last gasp higher when it entered the China market that I didn't see coming. But in the end I think I'm still going to be right. In fact at the time I was telling people here to get in a short AAPL long GOOGL pairs trade which would have worked great. It's one saving grace and possible chance to return to growth is project Titan(aka Apple car), which no one knew about a few years ago yet. But that is still at least 3 years away so there is a gap where the stock is only going sideways to down until then. And of course there is always the chance that an Apple car that by then will be...7 years behind Tesla could always bomb, like Apple tv did.
I still have no idea why amzn is valued at its price. Its trading at 50% above wmt valuation. Yet them make nowhere near as much as wmt. AWS is largely a commodity business too.
It is super simple. First you can't value companies with simple P/E, that never works because it doesn't account for growth. So then we use forward P/E which generally work well. However, in the case of AMZN you can't use that either. That's because they spend an inordinate amount on Capex because they want to. They don't have to do that, in fact they can stop doing that anytime they want to and show way higher profitability than WMT if they felt like it. They turned off the spending slightly this quarter and beat earnings estimates by double, because they felt like it. But in general this won't be the case, in general they will continue spending because that is what fuels their growth. WMT on the other hand does not grow. With a business model like that you can't judge it based on any earning multiple because their earnings are not based on profitability, its based on how much they feel like spending on capex that quarter. Instead, you have to value it based on growth multiples and gross margins.
man i got killed on oil bought psce at 45...but i quadrupled down when it was 10 and almost have made it back to even
By the way that is going to be the same case for Tesla. In order to grow rapidly in the automotive business the capital costs are huge. So for the foreseeable future as long as they are supply constrained they will spend every penny that they earn on capex to expand capacity and grow. This mean no earnings and losses for years just like AMZN did. But in any quarter they could choose to cut back the capex spending a little just to show wall st its profitability as a proof of their business model. And they will do that from time to time like AMZN just did today, not only to give the stock price a boost but to maintain credibility. People try to value Tesla like a GM or F and it is laughable. They have not seen a hyper growth auto company before because the last one was 75 years ago, so they have no comparables to base their valuations on, so they choose GM and F even though those companies have stagnant growth and contracting profitability due to the global trend in tightening emissions standards. Meanwhile Tesla is growing as fast as it can spend on capex, and profitability will only expand with economies of scale and declining battery costs.
Earning are not based on how much capex you spend on the quarter. Capex is expended over time. AMZN and WMT gross margins are pretty similar so I would find it hard to believe the AMZN can show more profitability than WMT. In 20 years of operation their retained earnings is 2.5 billion. That is pretty terrible. The one part of their business that is showing good margins and performance is AWS. I guess it is being valued as a 100 billion dollar business.
