Originally Posted by
Planetrain
I like Tesla and Amazon as companies, but I don’t like them at their current price. When speaking of PEs I mean it on a macro level. It’s broadly too high across the entire spectrum of stocks. There is nowhere else: CDs, Bonds, Money market, etc to put money, so everybody is piling into the stock market trying to get some yield. I think the market is propped up by low interest rates, the fed, and NAI No Alternative Investment. At some point (and I think sooner rather than later) we are going to see a crash because there just aren’t earnings to support the exorbitant prices. RCCL as an example is entirely a hope on future earnings. I’m not a gold guy, I’ll just wait for a better day to fish.
I continue to meter money into index funds for long range money, but in my mad money account I’m in a lot of cash and will wait for better opportunity.
https://www.multpl.com/s-p-500-pe-ratio
https://money.cnn.com/data/fear-and-greed/
totally get what you’re saying. I can see how someone would think companies are expensive at the moment. I have become very comfortable accepting that not only do I not know anything, neither does anyone else. Including the inventor of the PE ratio, Jim Cramer, anyone on CNBC and so on. When I buy excellent companies like TSLA and AMZN (even at today’s price) I think about the future potential. Amazon is just getting started, Tesla is has so many levers it’s unreal. They’re a $5 trillion company in the making.
I’ll say it one last time; if I tried to put a valuation on Amazon, Tesla, Netflix, Apple et al back in the day, I would have talked myself out of millions. Yes. Millions.
Attempting to value a company is a dead end from the start. Invest in the visionary founders like Musk, Bezos, Cook and watch the magic happen.
I can’t take credit for the returns I’ve seen. I started following the Motley Fool decades ago; I devoted a lot of time to watching what they did, listening to what they said, conversing with their community on their website much like we do here. It take a lot of time and up and down cycles. All I can say is that it’s worked incredibly well for me. I’ve conditioned myself to ignore all metrics and news with the exception of fraud or a company making a complete 180 from say making electric cars to mousetraps. Barring news like that, I. Just. Keep. Buying. (And most importantly, holding).
sorry if that sounded soap boxy. Not my intent and I’m just reflecting here on what has worked so well for me.