A couple things;
First-
Its very in vogue to compare the market today to the dot com bubble. So I’ll ask you this; is there a difference between Tesla and
pets.com? That’s why this isn’t the dot com bubble. Tesla is launching more starlink satellites today.
Second-
I added this update to my previous post and I want to repost it here, because it’s important“EDIT- For fun I checked on the history of morning star fair valuations. Their lowest since 2014 was 34.20 adjusted all the way up to its current “nose bleed” fair value of $349. Since 2014, if you anchored the price of Tesla based on Morningstar models and never bought because of it, you’ve missed out on some incredible growth. Like 15,000% kind of growth. And yet, Morningstar continues to “adjust” fair value up. What does that tell you?”
Third-
Do you think because you’re investing in “value stocks” today that they’re immune to the burst of a bubble? Bubbles, when they pop are indiscriminate and typically take entire economies with it. Based on your thesis you should not invest at all, and perhaps stash cash under your mattress.
Fourth-
I challenge what Mr. Burton Malikel says (what makes him so smart, anyways?). My challenge is based on this chart of the S&P alone (link attached. Still don’t know how to paste images to this board);
https://ibb.co/whR5RKN
Fifth-
When you invest in a company, do you want them to slow growth (be it geographically or by investing less in new technology) in an effort to maintain less EBIT and higher EV/EBIT, or would you rather they expand and invest heavily so as to increase EV in the future at the expense of the ratio today?