You're right that giving up on massive growth at this point (and reigning in the accompanying spending) would not be a good idea. But "boring" has nothing to do with it.
You're right that giving up on massive growth at this point (and reigning in the accompanying spending) would not be a good idea. But "boring" has nothing to do with it.
Warren Buffett: "No stock market bubble, but few bargains":
http://money.cnn.com/2015/04/02/investing/warren-buffett-stock-market-bubble/What Warren says is the issue here. There is NO "growth at a reasonable price" this far into one of the largest bull markets of all time. If you want high growth companies, they are priced accordingly. There are few "discounts" and if you find one like late September, that's the best you can do, which is what I did with FB and UA. If you can't handle a P/E of ~100, don't buy. simple as that.
And BTW, the last number I have for margins for FB is 94.81%.
Now you're getting market advice from a realtor?
Pointing Out the Obvious wrote:
Now you're getting market advice from a realtor?
Hey, c'mon! The guy is anchored to reality! That's gotta count for something.
In regards to Facebook, the high growth and high multiple narrative is the same story sold at market tops. I seriously doubt that it is truly different this time.
Igy
Valeant Pharmaceutical shows the danger of the high growth, high multiple narrative. Under $80 after being as high as $263.81 (August 18th). The problem always is and will remain can growth fulfill the multiple expansion. At one time Valeant had a PE multiple in excess of 100, multiple compression has dropped it to a 43 PE today. Facebook's multiple is now 110 after its great 1 cent quarter over quarter earnings increase.
Ghost of Igloi wrote:
In regards to Facebook, the high growth and high multiple narrative is the same story sold at market tops. I seriously doubt that it is truly different this time.
Igy
that narrative is also sold at market bottoms and middles and upper middle bottoms and lower upper middle etc...
high growth companies will always command high multiples and get many headlines. No matter what the broad market conditions are.
Also, I read in the WSJ that in 2014 there were exactly zero defaults among munis rated by morningstar. zero.
agip,
Yes, many that are buying at top are the same ones selling at the bottom. That is the point. I actually bought Facebook under $20 after the IPO failure, sold it in the $30s. So I have no problem buying a high growth name when it is out of favor. Personally I would never use Facebook. My aunt posted about a grandson's trip to Europe and was scammed $1,500 when someone used the information to dupe her.
Igy
Ghost of Igloi wrote:
agip,
Yes, many that are buying at top are the same ones selling at the bottom. That is the point. I actually bought Facebook under $20 after the IPO failure, sold it in the $30s. So I have no problem buying a high growth name when it is out of favor. Personally I would never use Facebook. My aunt posted about a grandson's trip to Europe and was scammed $1,500 when someone used the information to dupe her.
Igy
no, that's not the point - the point is that you can't point at a facebook type stock and say 'well there you go - that proves we are in a bubble' because facebook type stocks will do great in all but a catastrophic environment. Facebook type stocks are not confined to market tops.
I think FB is an amazing company and product - they have a vice grip on billions of people - and so good for running clubs.
Sory about the fraud tho.
agip,
Of course we disagree on the bubble, as you know I think we are in one. But who knows, maybe Facebook will lead to a cancer cure or something significant other than arranging workouts with my buds. I have found my phone or email works just fine.
Igy
Bill Gross monthly commentary: https://www.janus.com/bill-gross-investment-outlook
Buyback party at a crossroads:
Shake Shack is reporting after the close - wish me luck gents. So far I am up 3%, or a nice meal for three.
agip,
Buy or sell in front of earnings?
Igy
Ghost of Igloi wrote:
agip,
Buy or sell in front of earnings?
Igy
well I'd say eat in front of earnings
I poked around - traders are expecting a big move - options appear to suggest traders expect a 5-10% move in either direction.
agip,
Momentum says yes, but earnings of CMG and BWLD says maybe not. Hopefully you will get a meal for thirteen, a baker's dozen.
Igy
agip,
Baker's dozen....
looks good so far -
Sales up 67%
Same store sales up 17%
no idea what shenanigans they use to compute earnings but I'm sure that's good too.
Stock up 4% after hours after being up 4% today.
burgers all around.
Medium rare, please.