agip,
OK. Be careful with the old guy.
Anyway, I still think this market is goofy.
We'll see where we go from here.
Igy
agip,
OK. Be careful with the old guy.
Anyway, I still think this market is goofy.
We'll see where we go from here.
Igy
The markets go up. The markets go down.
Repeat.
Markets go up x 6 = Bull Market
Markets go down x 2 = Bear Market
agip wrote:
Ghost of Igloi wrote:agip,
WDC's business is so cyclical you better hope this economy has legs, because if not that stock has a lot further to fall.
Igy
c'mon man! I don't care about WDC - I was just ribbing you for picking two stocks and extrapolating their frothiness to the rest of the market.
So I picked one cheap stock and extrapolated that out. equally silly.
that said, the stock looks up after hours on earnings - huah
Did I say I didn't care about WDC? Just kidding! Up 10% today and 15% in 4 days.
More seriously - 1Q GDP revised up to +0.6% and 2Q's first read at 2.6%. Looks like 1Q's low number was another anomoly - due to weather and that weird adjustment that the gov't doesn't seem to get right for 1Q.
agip,
I bet you a pine float that WDC hits $60 before it hits $115 again.
Igy
Ghost of Igloi wrote:
agip,
I bet you a pine float that WDC hits $60 before it hits $115 again.
Igy
I do love bets, I really do, but I have no flipping clue on this stock.
I'll put it in my calendar for a year from now and if we are still around one of us can gloat.
agip,
Sounds good. There is a local company that has a very cyclical business similar to WDC. The locals have a tendency to view the stock as a Blue Chip long term hold type of stock. In my time in the business the stock has never acted that way, more high highs and low lows. One does well buying at the low of the business cycle and selling as the cycle approaches stall speed.
Igy
Ghost of Igloi wrote:
agip,
Sounds good. There is a local company that has a very cyclical business similar to WDC. The locals have a tendency to view the stock as a Blue Chip long term hold type of stock. In my time in the business the stock has never acted that way, more high highs and low lows. One does well buying at the low of the business cycle and selling as the cycle approaches stall speed.
Igy
yeah - they aren't buy and holds.
and one of the tricky parts about these cyclicals is valuing them - typically they have the lowest PE...just when earnings are peaking. So they look really cheap just when they are actually the riskiest. Then at the bottom of the cycle valuations look very high because earnings are so low.
So while WDC's PE might seem low at 12 or so...if that is at peak earnings, that number is very misleading.
I think you're supposed to calculate/guess what peak earnings are and then use that instead of reported earnings. But that's just guesswork.
agip,
Correct. You see that in CAT, XOM, FCX, CLF and MU to name a handfull of cyclical stock. Unfortunately for shareholders the value trap may take them a lot lower.
Igy
agip,
How many times have I heard that the technology market is not like 2000? Well maybe so, but take a look at Linkedin (LNKD) earnings. The talking heads of CNBC highlighted Non-GAAP net income of $71 million, and non-GAAP EPS of $0.55. Well GAAP (Generally Accepted Accounting Principles) was a loss of $68 millions, and a loss of ($0.53) a shares. Depreciation and amoritization totaled $99 million while stock compensation was $145 million. Yet in the after market some muppets paid up for the stock.
Igy
How's that confirmation bias working for you, Igy? Nothing like one cherry picked stock to fan those flames, eh?
Ghost of Igloi wrote:
agip,
How many times have I heard that the technology market is not like 2000? Well maybe so, but take a look at Linkedin (LNKD) earnings. The talking heads of CNBC highlighted Non-GAAP net income of $71 million, and non-GAAP EPS of $0.55. Well GAAP (Generally Accepted Accounting Principles) was a loss of $68 millions, and a loss of ($0.53) a shares. Depreciation and amoritization totaled $99 million while stock compensation was $145 million. Yet in the after market some muppets paid up for the stock.
Igy
well sometimes it is a market of stocks... and some story stocks get very expensive. But obviously the tech market as a whole is nothing like it was in 2000.
http://www.businessinsider.com/nasdaq-pe-2000-and-today-2014-8(I believe the PE on teh Nasdaq is around 23, now, not the 35 or so this chart seems to say it was in 2014)
people are always using oddball measurements like non gaap earnings - and sometimes they actually make sense - eliminating one-time and unusual items gives a better view of a company's earnings.
for ex, let's say a company lost a huge lawsuit and that produced a loss for the quarter. seems to me the money paid out SHOULD be ignored, and GAAP earnings showing a loss would make little sense and be severely misguiding.
that said, of course companies play fast and loose with this...
agip,
Unfortunately LNKD is one of many companies that make regular use of non-GAAP accounting. In my view is does more to distort than explain earnings.
Igy
Sally V,
You developing a Canadian accent, eh?
Here is a article from Barrons on the same subject. Looks like the author has confirmation bias, eh?
Igy
http://online.barrons.com/articles/how-much-do-silicon-valley-firms-really-earn-1435372718
No doubt.
i think this thread can get has many post has mike rossi's thread can, we just need to put in the hard work, time, and dedication, now lets go and get this done!!!
pretty good month - US stocks up 1.7% in July... and a less impressive 3.6% for the year to date.
world stocks up 0.5% in July and 4.1% year to date
nothing spectacular but world stocks rising at an annualized rate of 7.03% is takeable.
I have a different take. The S&P performance is being driven by a narrow group of high capitalization stocks: FB, GOOG, DIS, AAPL, and GILD. While the Dow Jones Industrial Average is down 0.75% year-to-date, and the Dow Transportation Average is down 8.18% year-to-date. At the same energy and commodities continue to struggle. China's stock market has not stabilized even with unprecedented government intervention. Puerto Rico's financial ills are becoming a daily topic of conversation. Lately many of the story stocks that have driven this market recently are weakening. Energy high yield bonds are trading at levels that predict default or worse.
One can color it Bullish if you like, but it is gilded and not gold.
Ghost of Igloi wrote:
I have a different take. The S&P performance is being driven by a narrow group of high capitalization stocks: FB, GOOG, DIS, AAPL, and GILD. While the Dow Jones Industrial Average is down 0.75% year-to-date, and the Dow Transportation Average is down 8.18% year-to-date. At the same energy and commodities continue to struggle. China's stock market has not stabilized even with unprecedented government intervention. Puerto Rico's financial ills are becoming a daily topic of conversation. Lately many of the story stocks that have driven this market recently are weakening. Energy high yield bonds are trading at levels that predict default or worse.
One can color it Bullish if you like, but it is gilded and not gold.
some truth there for July anyway - small cap indices were flat or even down a hair for the month. So that does suggest a few giant stocks are driving the indices.
but for the year small caps are good - up around 3.9%. By definition that is broad support, not a few giants.
this is interesting to me - it won't format right, but it is year to date returns by asset class, per morningstar.
what is working is growth, and what is failing utterly is value.
Not sure what that means.
http://news.morningstar.com/fund-category-returns/Name 1 Month(%) YTD(%) 3 Month(%) 1 Year(%) 3 Year(%) 5 Year(%)
U.S. Equity Fund
Small Growth 0.29 8.06 4.66 16.61 18.63 16.47
Large Growth 2.95 7.10 3.53 14.36 18.44 16.14
Mid-Cap Growth 1.00 6.93 2.36 13.96 18.32 15.64
Large Blend 1.55 2.69 0.88 8.97 16.71 14.69
Mid-Cap Blend -0.08 2.37 -0.37 7.51 17.44 14.44
Small Blend -1.63 1.83 0.06 7.72 16.31 14.09
Mid-Cap Value -0.44 1.16 -1.15 5.87 17.55 14.43
Large Value 0.69 0.76 -0.52 5.86 15.67 13.67
Small Value -2.45 -0.78 -1.92 3.38 15.43 12.76
So you downplay the S&P gains by saying they were due to a narrow group of stocks, then in the next sentence you highlight DOW losses? The DOW is the epitome of a narrow group of stocks. Your hypocrisy is mind boggling.
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