Current Affairs Stocks and shares and stuff

[catcherintherye]

Do you think AAPL is overvalued? If so, why/what's going on?
Do you think NFLX is a good buy for the future? Seems like it has a huge subscriber moat/brand. I know these things can change fast, but seems like they have a lot of intrinsic value once the market factors in future profits.

Yes good questions.
AAPL first. Everyone will have their own way to value a company. My own view is it moderately overvalued. I tend to look at CAGR rate and think what I want. I'd say you are still a fair bit off 10% p/a. I think you're getting a 5% return on Apple currently. I suspect the S&P500 is probably around a 2-3% return over a similar time frame, so maybe fairly valued on that point. My view is slightly overvalued. I'd like to see it halve again in price before I looked more closely.

As for NFLX I am genuinely on the fence on that one. Seen some people say it has a good moat. It seems cool, people like it, streaming is not easy, and it got ahead of the game. Also seen stuff that shows it has to spend a huge amount of CAPEX just to maintain position. Like Disney and Amazon just have a lot more cash to throw at it. How long can NFLX stay in the fight? It's interesting, I can see cases for both sides on that.

I'd want NFLX at a cheaper price. It's not advice, but would prefer AAPL over NFLX currently. Personal preference though.

 

[catcherintherye]

For some stocks maybe, but Alphabet's P/E ratio is currently 20, Microsoft 26, Apple 23. They're not in outlandish territory at all.

Yes fair. I mean there has just been a bit correction though and all 3 companies have had earnings massively inflated by lockdowns. They are all behemoths too, I am not sure there growth rates can be maintained. I wouldn't say they are extreme valuations, but they are all above the long term average of around 15, by a reasonable distance.

I think FB is around 10 currently. That really appeals to me.

 

[catcherintherye]

The difference with the dotcom era is that none of those companies were even close to turning a profit, whereas the big tech firms today are making huge sums. I can see Uber, Tesla et al getting panned, but not Google and Microsoft.

I would draw a distinction between FAANG and the newtech stocks you've mentioned mate. I appreciate a lock of them are tech stocks, but they are qualitatively different, from a business profile, and as you say, crucially a balance sheet perspective.

The stocks that essentially exist on the ARK ETF's are going to get annihilated.

Google/microsoft will see a decline, but not a collapse.

 

[Efcjake]

View attachment 140675

Can we get an update to this chart please?

Ta
X

 

[nikom court]

Can we get an update to this chart please?

Ta
X

on 31 december
x

 

[LinekersLegs]

 

[Bruce Wayne]

Quite a handy reminder right now

 

[SerenityNigh]

Will soon be time to buy, just have to sort out when

 

[catcherintherye]

The key point here though, is we are very likely heading into a recession. The overall premise is fair though

 

[orchard]

Will soon be time to buy, just have to sort out when

“All the major banks know that the cost of living crisis is out of control,” said the top financial advisor.

“The pandemic was bad enough and highlighted how certain groups of people were going to be worse affected, the poor, minorities and so on. But the combination of energy and food shocks are a tipping point that will push Western societies over the edge. This will impact everyone. Well-to-do middle classes will find it hard to afford staple foods and pay bills. So we are anticipating dangerous levels of civil unrest that could spiral into an unprecedented social crisis.”

The warning comes as Bank of England governor Andrew Bailey described how “apocalyptic” food and energy price rises and a 30-year high rate of inflation would lead to a “very big income shock” driving up unemployment and slashing household spending.

But that barely scratches the surface. The senior US banking official warned Byline Times that the current crisis was about to plunge the general public, including middle classes, into deepening poverty. Worse, the conventional economic toolbox to address financial volatility had run out of stream:

“There isn’t anything left in the toolbox of the existing financial system. We’ve run out of options. I can only see the situation worsening.”

The official claimed that they had been made aware of the internal planning by various banks through conversations with senior colleagues in recent weeks.

 

[Bruce Wayne]

“All the major banks know that the cost of living crisis is out of control,” said the top financial advisor.

“The pandemic was bad enough and highlighted how certain groups of people were going to be worse affected, the poor, minorities and so on. But the combination of energy and food shocks are a tipping point that will push Western societies over the edge. This will impact everyone. Well-to-do middle classes will find it hard to afford staple foods and pay bills. So we are anticipating dangerous levels of civil unrest that could spiral into an unprecedented social crisis.”

The warning comes as Bank of England governor Andrew Bailey described how “apocalyptic” food and energy price rises and a 30-year high rate of inflation would lead to a “very big income shock” driving up unemployment and slashing household spending.

But that barely scratches the surface. The senior US banking official warned Byline Times that the current crisis was about to plunge the general public, including middle classes, into deepening poverty. Worse, the conventional economic toolbox to address financial volatility had run out of stream:

“There isn’t anything left in the toolbox of the existing financial system. We’ve run out of options. I can only see the situation worsening.”

The official claimed that they had been made aware of the internal planning by various banks through conversations with senior colleagues in recent weeks.

I would drink bleach but I can't blooming afford any.

 

[orchard]

I would drink bleach but I can't blooming afford any.

Lol, just trying to provide perspective, this situation may be unprecedented, and I believe it is...perhaps that's one of the reasons why Russia's getting the blame for things that were obviously out of control before their contribution - giving confidence to the markets by creating the illusion it's only a temporary glitch.

 

[catcherintherye]

Lol, just trying to provide perspective, this situation may be unprecedented, and I believe it is...perhaps that's one of the reasons why Russia's getting the blame for things that were obviously out of control before their contribution - giving confidence to the markets by creating the illusion it's only a temporary glitch.

It's like the 70's all over again really mate.

They say the FED generally tends to fixate on fixing todays problems with yesterdays dilemmas. They got caught out in a major credit squeeze/liquidity crisis in 2008 so have ensured that won't happen again. Probably overbaked the pie a bit in the process.

We have had a prolonged period of low inflation, so in terms of mean reversion, some inflation higher than say 3-4% which is pretty standard is now being seen.

 

[catcherintherye]

I would drink bleach but I can't blooming afford any.

I think I remember discussing with you around 12-18 months ago with the markets booming the contradictory nature of it all, and not knowing quite what to do for right or wrong.

I'm not sure many times can sustain record valuations coming at the time of lockdowns.

 

[Bruce Wayne]

I think I remember discussing with you around 12-18 months ago with the markets booming the contradictory nature of it all, and not knowing quite what to do for right or wrong.

I'm not sure many times can sustain record valuations coming at the time of lockdowns.

Oh for sure, it was always due a correction as you can't have tech stocks going up 30% year on year.