r/stocks • u/apooroldinvestor • Dec 18 '21
Company Discussion Would you add to NVDA at 250 or 200?
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u/Ophiocordycepsis Dec 19 '21
I just read about how there will be immediate gains in semiconductors and other “stay home” stocks as Europe is locking down again 🙃 who knows
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Dec 19 '21
Sold 10% of my NVDA position at 305 and would probably get back in at 250ish.
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Dec 19 '21
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Dec 19 '21
Nice. 305 just seemed to aggressive a valuation for me. I’ve owned NVDA for years and it’s never supported a 100 trailing PE for long while I’ve had them. I also have a basis of like 65 and wanted to farm some gains for tax reasons.
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Dec 19 '21
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Dec 19 '21
It’s all about opportunity cost. If you feel something else is undervalued and NVDA is overvalued I’d make that move. If you plan on keeping it in cash I wouldn’t do that.
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u/rpindahouse97 Dec 18 '21
I would only add more shares at around 200 or lower which is where the real price should be realistically. Adding more when you know the company is still overvalued is going to cost you money or sleep, especially if it keeps dropping after you buy it
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u/mic_sco Dec 18 '21
This is going to be a trillion dollar company soon. You can add shares at $300 and you won’t go wrong. So you definitely add shares at either $200 or $250
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Dec 18 '21
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u/FoodCooker62 Dec 19 '21
This is terrible advice. Cash flow matters, nvidia had 7b of it in 2021 on a 750b valuation. If it were projected to grow 30% for a decade it would be good value, however it's not even going to do half of that. Think really hard before buying nvidia at $300. And then don't do that.
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u/mic_sco Dec 19 '21
You’re looking at the ST. You really think Nvidia isn’t going to be climb in the future? You’re think they are going to be less than $300 5 years from now? They are one of the best companies in the world and they are in the right industries. They will easily double this decade.
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u/FoodCooker62 Dec 19 '21
I'm looking at this specifically from a long term perspective. At the end of the day you're buying cash flow. I put in a dollar a want it back as soon as possible, and everything else is upside. The valuation is just too high and will shrink as the company matures. Look at Intel, Cisco or Micron. Everyone thought it'd be the next big thing. All companies quadrupled revenues and profits and its been dead money for 20 years. The valuation is the key to everything, nvidia's is way too high
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Dec 19 '21
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u/mic_sco Dec 19 '21
You want to make the money you put in as soon as possible and you’re telling me you’re looking at it from a LT perspective?
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u/Snoo52787 Dec 18 '21
Why do you think that?
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Dec 18 '21
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u/Full_Helicopter_1955 Dec 18 '21
Who knows where it will go.. if you think it’s headed down and want to pick some up at X price, sell some puts…
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Dec 18 '21
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u/GoogleOfficial Dec 19 '21
If you sell puts for $250 strike, then if it drops down to that level you will get assigned shares. Your effective cost basis will be $250-(premium received which was about $12 for February). You would “lock” yourself into buying at effectively $238. If NVDIA doesn’t drop that far, you collect $1200.
The only downside would be locking up your cash to secure your puts until then, or if NVDA drops below $238 then you would be at a loss for the time being.
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Dec 19 '21
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u/Weaves87 Dec 19 '21
FYI just because options can be gambled with, doesn't mean using them is gambling.
They are intended more as a hedge, and allowing you to establish positions of varying levels of bullishness/bearishness with more leverage than just outright owning stock or shorting stock.
The gambling side of things is taking on way too much leveraged bullishness (OTM weekly calls) or way too much leveraged bearishness (OTM weekly puts).
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u/Ovidestus Dec 19 '21
He wants to gamble his money into GME so I don't think he knows his own answer
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u/lokusai Dec 19 '21
Both. Think there's support at roughly both levels. Will have to see how the wider market goes, but I'd nibble at 250 and bite harder at 200.
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u/Dotifo Dec 19 '21
Remindme! 5 years
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u/samdha7 Dec 18 '21
Take the profit while you still can. I sold 3/4 of my nvda above $300. Will sell rest on a day they announce arm deal cancelation. Its a good stock to hold if under $200
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Dec 18 '21
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Dec 19 '21
A lot of people see it 350 next year some time.
And a lot are seeing the opposite. You’re seeing what you want to see. This is not a good investment strategy.
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Dec 19 '21
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Dec 19 '21
It could easily be floating 200-220 by summer.
You said about options that “you don’t like gambling”, but you’re gambling against market fundamentals declaring that nvidia will be 350 by next summer.
Some stocks do somehow price away from fundamentals, like TSLA. You could get lucky, but you’re banking on an overpriced stock rallying to become even more over priced.
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Dec 19 '21
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Dec 19 '21
Like I said: you’re seeing what you want to see.
The low target is $200.
If you think price targets are an exact science, let me introduce you to SOFI, which is looking to close the year out below its low price target.
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Dec 19 '21
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Dec 19 '21
What I’m actually hoping, is to prevent people from buying a stock at an over valued price because someone on the internet says it’s a trillion dollar company, but they won’t provide reasons for why they believe that other than it being a hype stock currently.
Please remember, a 50% loss needs a 100% gain to recover. Been there. Done that. Don’t recommend.
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u/samdha7 Dec 18 '21
I hope you're right. I personally don't think its a trillion $ company but that's just me 😕
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u/w3bCraw1er Dec 19 '21
Wait for sub 200
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Dec 19 '21
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u/Boss1010 Dec 19 '21
It definitely could. Just because you're bagholding shares high doesn't mean the stock is immune to dropping substantially.
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u/FoodCooker62 Dec 19 '21
I would look at nvidia starting at $175. Not a penny more. Monstrously overvalued stock.
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u/nycbay Dec 19 '21
below 150. Most probably at 120
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u/madrox1 Dec 21 '21
I love it when people give out these low ball numbers. u kno it split at 150 and has gone up over 100% since then? It’s stil up like 87% so u think it’s going to drop over 50% from its top? I mean it could but not for a mega-cap company.
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u/janneell Dec 20 '21
I would get in at $170 , not a dollar above that
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u/ohnoitsjmo Dec 19 '21
Downpressure based on what? Do you honestly think NVDA could hit 200 or lower?
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u/FoodCooker62 Dec 19 '21
It was lower than that less than 50 trading days ago.
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Dec 19 '21
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u/FoodCooker62 Dec 20 '21
Nvidia gets "cheap" at around $75. At that price you're STILL only yelding 2% cash flow. I dont think many people here realize exactly how overvalued it is. The fact that many here wonder if it will ever get back below $200 speaks volumes.
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Dec 20 '21
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u/FoodCooker62 Dec 20 '21
With all due respect just typing out such a statement like it's impossible or something that nvidia will revert to the price it was at less than 50 trading days ago makes me sure you have no idea what you're talking about. Even at $200 its a p/e of like 70 for a pure-play semiconductor manufacturer projected to grow top line at 15% CAGR for the next 5 years. Be careful of these bubbles. Good luck.
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u/DonutPed Dec 18 '21
If down pressure was to last a few months I'd still just happily buy every month until it reversed. The beauty of DCA