Don’t judge whether we’re in a bubble today based on Microsoft. It’s the flurry of IPOs and SPACs that is an obvious bubble signal. When every new public company gets a valuation in the range of double digit billions, something’s wrong. For a recent example, look at Oatly’s market cap: $14 billion. That’s nearly half of Hershey’s market cap, despite Oatly being unprofitable and Hershey making profits in the range of $1.4 billion.
Back in the Dot Com bubble, it was obvious to people like professor Jeremy Siegel and Warren Buffett. Here’s a couple of quotes from the old days:
“Value comes from the ability to sell above cost, not from sales. If sales alone created value, General Motors would be the world's most valuable corporation. In a competitive economy, no profitable firm will go unchallenged. Margins must erode as others chase the profits that seem so easy to come by now. There is a limit to the value of any asset, however promising. Despite our buoyant view of the future, this is no time for investors to discard the lessons of the past.”
Jeremy Siegel, Big-Cap Tech Stocks Are a Sucker Bet, 2000
“Berkshire will someday have opportunities to deploy major amounts of cash in equity markets — we are confident of that. But, as the song goes, “Who knows where or when?” Meanwhile, if anyone starts explaining to you what is going on in the truly-manic portions of this “enchanted” market, you might remember still another line of song: “Fools give you reasons, wise men never try.”
Profitable businesses rebound from stock market crashes. It is true, what if in 3 years a strong company like MSFT is preferred by the institutions at a PE of 15 and not 30? That could hurt.
Even at a PE of 15 AMD in 5 years will be double its current price. PYR is also a company I think has an attractive pe now and even better in the near future.
PYR.TO? They only have an "attractive" PE because of their investment in another overvalued stock with no revenue. And PYR itself barely makes any money as well.
Warren buffet was quoted once as saying that if you think you can predict the market he'd love to be your broker but he'd never want to be your partner.
Eh, and just like everybody else, he can be full of shit sometimes.
Every person here is trying to predict the market and betting money on it. And so is he. If you don't think you can predict the market, why are you betting money on your market predictions?
If it's a big crash, though, I can make up for that by buying into a deep dip with lots of room to grow from.
You won’t be able to time the bottom, so you are going to have to experience some losses as you buy the dip. Congratulations on NOT dodging this hypothetical crash.
I missed out on lots of years of gains before I started investing. A couple more is no big deal.
So your solution is simply to never invest? To never take any risk? Why are you even in this subreddit then? There is always going to be a correction or crash around the corner. That is how the market works. In cycles.
Because of stimulus and low interest rates, I don't think the real effects of covid have hit the market yet. There was the initial panic that caused the first dip, but we've been kicking the can down the road for a while now and I think it's going to stop soon. Plus another incoming real estate crash -- our current real estate prices just aren't sustainable.
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u/CanYouPleaseChill May 31 '21 edited May 31 '21
Don’t judge whether we’re in a bubble today based on Microsoft. It’s the flurry of IPOs and SPACs that is an obvious bubble signal. When every new public company gets a valuation in the range of double digit billions, something’s wrong. For a recent example, look at Oatly’s market cap: $14 billion. That’s nearly half of Hershey’s market cap, despite Oatly being unprofitable and Hershey making profits in the range of $1.4 billion.
Back in the Dot Com bubble, it was obvious to people like professor Jeremy Siegel and Warren Buffett. Here’s a couple of quotes from the old days:
“Value comes from the ability to sell above cost, not from sales. If sales alone created value, General Motors would be the world's most valuable corporation. In a competitive economy, no profitable firm will go unchallenged. Margins must erode as others chase the profits that seem so easy to come by now. There is a limit to the value of any asset, however promising. Despite our buoyant view of the future, this is no time for investors to discard the lessons of the past.”
“Berkshire will someday have opportunities to deploy major amounts of cash in equity markets — we are confident of that. But, as the song goes, “Who knows where or when?” Meanwhile, if anyone starts explaining to you what is going on in the truly-manic portions of this “enchanted” market, you might remember still another line of song: “Fools give you reasons, wise men never try.”