The stock market

[joethastud]

 

If I was to invest in a stock right now, it'd be Apple. The market's valuation of them is nonsensical and their P/E is absurdly low.

 

It'd be a good idea to get into them before their quarterly report in a week or so.

 

Yikes.....  

 

I by no means think this is the end of Apple's reign, but yikes.  

[DaveW]

 

Yikes.....  

 

I by no means think this is the end of Apple's reign, but yikes.  

JOE!!!!!!!! You live, I assumed Stat tracked you done and gave you a non refundable boom daddy to the chin that ended you.

Edited January 29, 2016 by DaveW

[Brock Beauchamp]

Yikes.....

 

I by no means think this is the end of Apple's reign, but yikes.

This dip is nonsensical. Apple's financials are insanely strong.

 

They have enough money in the bank to buy about 75% of the shares of Microsoft, for crying out loud.

 

Their long term outlook has question marks but the market has been punishing them for a full year as Apple continues to break its own records quarter after quarter. It's as if investors are saying "you're no longer growing at a 15% rate YoY so now we're going to punish you as if that growth never happened at all".

 

At some point people will pull their heads out of their asses and the stock will self-adjust.

[joethastud]

 

This dip is nonsensical. Apple's financials are insanely strong.

They have enough money in the bank to buy about 75% of the shares of Microsoft, for crying out loud.

Their long term outlook has question marks but the market has been punishing them for a full year as Apple continues to break its own records quarter after quarter. It's as if investors are saying "you're no longer growing at a 15% rate YoY so now we're going to punish you as if that growth never happened at all".

At some point people will pull their heads out of their asses and the stock will self-adjust.

 

I agree, but still, short term, yikes.

 

[Brock Beauchamp]

 

I agree, but still, short term, yikes.

Yeah, their short-term valuation is bonkers. If I hadn't recently put money into high-risk shares of Fitbit (the market is needlessly down on them right now) and Square (they're a big risk but I like their 10+ year potential), I'd double-down on Apple. They seem to be a lock to gain back at least 10-15% once the market rights itself.

 

My hope is Apple fights their recent downturn by upping their dividend yield. As someone who wants to move more to dividend stocks (I'm overly weighted in high-risk stocks right now), that'd be a lure to keep me in the stock long-term.

 

God knows Apple has the profits and on-hand cash to do it.

[Mike Sixel]

I just bailed on NFLX.......too many losses, too many competitors. Doubled down on Disney and NVDIA.

[Brock Beauchamp]

 

I just bailed on NFLX.......too many losses, too many competitors. Doubled down on Disney and NVDIA.

Interesting. I'm staying in Netflix because I like their long-term potential. They're well ahead of the game in the rest of the world and it's going to be tough for the rest of the industry to catch up to them outside the US. I think they'll continue to grow for quite some time (though their short-term losses will remain as they aggressively expand).

[Mike Sixel]

I did it in my tax free account, where I can be more active (yes, I know this is a terrible idea). 

 

I love NFLX, but I am worried about PRIME, and I am worried about their fee being too high over seas. I love amazon, msft, google, apple....and NFLX, but more nervous about NFLX.

[Brock Beauchamp]

 

I did it in my tax free account, where I can be more active (yes, I know this is a terrible idea). 

 

I love NFLX, but I am worried about PRIME, and I am worried about their fee being too high over seas. I love amazon, msft, google, apple....and NFLX, but more nervous about NFLX.

Prime is great but Amazon's video service is only available in a handful of countries and Amazon's ability to scale to those countries quickly is limited, as they offer *no* services to the overwhelming majority of the world.

 

I like Amazon and I think they have a lot of potential but they're years behind Netflix and they can't scale quickly because they're a lot more than a streaming company. Before Video moves into a country (much less Prime itself), Amazon needs to lay the groundwork for shipping, books, and a host of other things. Netflix, on the other hand, has already started that expansion and they've done it aggressively.

 

Prime might catch up in several years but there's a good chance it'll be too late to stop Netflix by that point (plus, Netflix's self-generated content is generally superior both in quality and quantity).

[Mike Sixel]

I agree with all of that, I just changed my mind on them over the last week.....or two.

[Brock Beauchamp]

 

I agree with all of that, I just changed my mind on them over the last week.....or two.

And that's fair. There is reason to be cautious with the stock. It's a super high-risk stock and will be for some time.

[DaveW]

 

I just bailed on NFLX.......too many losses, too many competitors. Doubled down on Disney and NVDIA.

Excellent call on Nvidia, I would stay away from Disney TBH.

[Brock Beauchamp]

 

Excellent call on Nvidia, I would stay away from Disney TBH.

I have a small stake in Disney partially because I wanted to increase my dividend stocks to balance my portfolio.

 

I think we've seen the majority of Disney's growth in the short-term and whatever they're gaining in film, they're losing in ESPN.

 

The stock is a mixed bag, IMO.

[Brock Beauchamp]

I'm surprised you guys like Nvidia. They've been under my radar because I don't like their long-term future (admittedly, at a glance).

 

Third party GPUs are not going to be a long-term necessity as computing continues a slog toward SoC systems. They have a stake in SoC as well but I don't think it's a particularly strong presence against Qualcomm and Apple.

 

I'm not sold on their hardware (Shield) or virtual reality, either (I think VR isn't going to pan out into much of a market, just as smartwatches aren't going to be a powerhouse market).

 

But, again, this is at a glance. I haven't really examined their business in a long time.

[Mike Sixel]

 

I'm surprised you guys like Nvidia. They've been under my radar because I don't like their long-term future (admittedly, at a glance).

 

Third party GPUs are not going to be a long-term necessity as computing continues a slog toward SoC systems. They have a stake in SoC as well but I don't think it's a particularly strong presence against Qualcomm and Apple.

 

I'm not sold on their hardware (Shield) or virtual reality, either (I think VR isn't going to pan out into much of a market, just as smartwatches aren't going to be a powerhouse market).

 

But, again, this is at a glance. I haven't really examined their business in a long time.

 

They are big into helping build the future of self driving cars.....qualcomm is on my watch list.

[Brock Beauchamp]

 

They are big into helping build the future of self driving cars.....qualcomm is on my watch list.

True, there is that. I forgot they were into that market.

 

Though I wonder how that market is going to play out once Google and Apple enter it in earnest (personally, I'm not in love with the idea of Apple entering that market at all, at least not from the manufacturing side of things and Apple is loathe to offer only a software solution for anything).

[DaveW]

 

I have a small stake in Disney partially because I wanted to increase my dividend stocks to balance my portfolio.

 

I think we've seen the majority of Disney's growth in the short-term and whatever they're gaining in film, they're losing in ESPN.

 

The stock is a mixed bag, IMO.

One of the companies I worked for got bought by Disney, I cashed out my shares luckily at the right time. The ESPN issue (it's a huge one) as well as TV in general is a huge issue for them.

 

Star Wars is big for them in the near term (as is Marvel) but eventually the Marvel gravy train will slow up a bit (I for one am getting tired of all the comic book movies and retreads that keep coming out.....Deadpool excluded). Disney eventually will need something to pick up the slack for ESPN IMO

(Again these aren't exactly deep financial thoughts, just my "guess" on how the business by and large will go)

[DaveW]

 

 

I'm surprised you guys like Nvidia. They've been under my radar because I don't like their long-term future (admittedly, at a glance).

 

Third party GPUs are not going to be a long-term necessity as computing continues a slog toward SoC systems. They have a stake in SoC as well but I don't think it's a particularly strong presence against Qualcomm and Apple.

 

I'm not sold on their hardware (Shield) or virtual reality, either (I think VR isn't going to pan out into much of a market, just as smartwatches aren't going to be a powerhouse market).

 

But, again, this is at a glance. I haven't really examined their business in a long time.

The Shield is awesome, and gaming is only getting bigger and bigger and bigger. (Just look at your average yotube channel these days)

 

VR will hit in some form. I think Nvidia is an excellent one to buy currently.

Edited January 29, 2016 by DaveW

[diehardtwinsfan]

 

Interesting. I'm staying in Netflix because I like their long-term potential. They're well ahead of the game in the rest of the world and it's going to be tough for the rest of the industry to catch up to them outside the US. I think they'll continue to grow for quite some time (though their short-term losses will remain as they aggressively expand).

 

I'd be a bit concerned about them and Apple in the short term.  Netflix is hitting it's saturation with US customers and Apple I think is going to get hammered as the recession takes hold.  Might not be a bad idea to sell high on both and potentially buy back later.  I have no complaints about Microsoft's performance of late (full disclosure, I work for MSFT), but even that isn't recession proof.

 

I'd add that this bounce has been at best tepid. I think you're going to see another massive leg down in the next couple weeks.  I'd definitely advise moving some positions to cash where you can buy back in much cheaper.

[Mike Sixel]

My overly pessimistic day trader friend is convinced this is a dead cat bounce (or something like that), and we are DOOMED this year........

[Willihammer]

Netflix's has some really good original content. It will only get better and broader as the subscriber base grows, and then they can start ratcheting up the $8.99 price tag which is dirt cheap for the amount consumed. I think I read something like 45% of all internet traffic was Netflix streaming. I know they could charge double and I'd still probably buy it. That said, its already trading at 300+ P/E so who knows if that potential is already priced in.

Edited January 29, 2016 by Willihammer

[Brock Beauchamp]

The Shield is awesome, and gaming is only getting bigger and bigger and bigger. (Just look at your average yotube channel these days)

 

VR will hit in some form. I think Nvidia is an excellent one to buy currently.

Gaming is getting bigger but I don't think it's in ways that will benefit Nvidia in a positive way.

 

The companies that stand to profit the most from gaming expansion are Google and Apple, provided they get their **** together. Smartphones destroyed the handheld gaming market and at the rate SoC chips are advancing, the same could happen to the console market in the next half decade.

 

I predict the future of gaming is to be found on $150 set-top boxes, not dedicated consoles and PCs where Nvidia makes most of their money. Not only are consoles closed and expensive, developers who can use the power found within are becoming fewer and fewer by the day. In a market where it takes $10m to produce a game that draws customer attention, the risk of failure is too high for independent studios. Hell, even the big studios are tightening their belts because one big failure could cripple their business.

 

Nvidia themselves see this wave - which is why they created Shield in the first place - but I suspect they're going to become just one more option in an increasingly crowded Android space while Google rakes in money hand over fist.

[diehardtwinsfan]

 

My overly pessimistic day trader friend is convinced this is a dead cat bounce (or something like that), and we are DOOMED this year........

 

I just said something similar.  These stocks will be real cheap by the end of the year.  I'd advise taking that profit and waiting it out, or if you want, invest in ETFs that move inverse.  Stocks are the last to catch up to economics, and all the leading indicators went down sharply months ago. 

[Mike Sixel]

Don't forget to send me your thank you check on NFLX, Brock....

[Willihammer]

I mean, the addage is, buy low, sell high, right? So how do you people buy stocks with 300+ multiples and not crap yourselves. There is so much expectation of earnings growth already priced into the stock. What calculation are you making that says, "no this stock is STILL cheap?"

[Willihammer]

 

 

I just said something similar.  These stocks will be real cheap by the end of the year.  I'd advise taking that profit and waiting it out, or if you want, invest in ETFs that move inverse.  Stocks are the last to catch up to economics, and all the leading indicators went down sharply months ago. 

I learned the hard way that 2 or 3-times daily returns (ie. leveraged) ETFs aren't all they're cracked up to be. For one, they don't usually achieve that, the expenses are high, and volatility kills them. If an index starts at 1000 and after a year returns to 1000, a straightforward ETF/index fund will match but the leveraged ETF will have lost money. You really need to be confident in an unbroken bull/bear run to make money, and I don't know how anyone possibly could be.

[Brock Beauchamp]

 

I mean, the addage is, buy low, sell high, right? So how do you people buy stocks with 300+ multiples and not crap yourselves. There is so much expectation of earnings growth already priced into the stock. What calculation are you making that says, "no this stock is STILL cheap?"

I only buy into those stocks when I plan to hold onto them for a looooooong time because I believe in the business model's long term viability.

 

Like 20 years long. I mean a long time.

[Brock Beauchamp]

 

Don't forget to send me your thank you check on NFLX, Brock....

Heheh, I'm in it for the long haul with NFLX. Going into the stock, I fully expected a bumpy ride because they're aggressively expanding and a lot of money is going out the door while not enough is coming back in. I'm already way into the black on the stock and a bit of regression in the short- or even mid-term doesn't bother me.

 

I learned some time ago that I'm not clever enough nor do I pay enough attention to market ebbs and flows to "game" a stock. I pick companies that I believe in and, by and large, I stick with them for a long time.

[Willihammer]

Welp since Feb 1 the S&P is up 2%.

I wonder if we are experiencing a "soft landing" in the market.

[Brock Beauchamp]

 

Welp since Feb 1 the S&P is up 2%.

I wonder if we are experiencing a "soft landing" in the market.

Yeah, almost all my stocks are back in the black, if only slightly.

 

Except Tesla. I've taken a beating on Tesla, though I suspected that could happen going into the stock. Between their aggressive expansion and plummeting oil prices, they're in a difficult spot in the short- to mid-term.

 

But Tesla is a ten year stock for me so whatever.