Originally Posted by Seneca Pilot

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Originally Posted by mispoken

You seem to read a lot about investing. Maybe too much? Everyone, their brother and their pets publish their tried and true method, their valuation models, their fool proof ratio etc. That’s all so complicated. We look for numbers to validate our feelings or something we just read. Conveniently, whomever published the book or article you’re reading can find all the data needed to back up what they sold you.

Im not opposed to reading these types of things for some abstract ideas, but when they narrow it down to something simple like “If XYZ ratio is below this # it’s a buy”, I disregard that.

How is this for value investing; if you invest in a company today, ignoring “valuation” and instead believe it’s product will expand around the world and revolutionize an industry (Tesla comes to mind, often touted as the ultimate overvalued stock) don’t you think today’s price is a value compared to what it is in 10 years?

My problem with looking at “multiples” and “ratios” is they cannot look at the possibility that a company like Tesla will grow car sales, battery sales, solar sales, satellite launch sales, satellite internet sales, car software subscription sales, boring company sales, electrical grid rebuilding sales and so on. Dividing this number by that number just simply cannot take potential into account. Do your value models take into account WHAT these companies are doing with all of that cash? If so, how does that fit into a mathematical equation. To me, what they’re doing with the money is more important than the money itself. Are they investing in technology? Sales? Advertising? Management bonuses?

The only shot we have is investing in companies poised for significant growth. I’m talking 10x and beyond. Sure, I can invest in a paper company with great cash flows but what returns will that give me?

My personal favorite example and holding is Shopify. For the years I’ve held it since IPO, it’s always been “overvalued”. It’s valuation was “rich”. It’s “multiples” were stratospheric. And yet, it’s returned over 20x (at times) for me. Will I give some of that back if I keep holding? Sure. The last two weeks I’ve most definitely given some back, but is that because it’s a bad company or it’s multiples didn’t fit into some Wall Street or CNBC model? No. Just tech not being in Vogue the last couple of weeks. Consider what Shopify does, the size of the addressable market and the vision that the leader has for the company and I’ll take that any day over PE.

Admittedly, I don’t know your situation or age so perhaps what you’re doing is best for you. But from a simple future potential standpoint, if you’ve got 20-30 years to retirement, this is the only true shot a lowly airline pilot like me has at Ed Bastian type fortunes.

Final note; do be sure to keep track of your performance vs a benchmark like the S&P, ultimately it’s the only thing that matters.

whew.

Originally Posted by Big E 757

I get what you’re saying, and I’m kicking myself for selling SHOP a couple months ago, but Trips numbers on those stocks he posted, are pretty phenomenal. He may not get as many 10x and 20x trades, but really, how many are actually out there from year to year? Trips system has uncovered (I didn’t count) 8-10 doubles and triples in a year and a half, and like he said, timing has been on his side, but it obviously works. What’s wrong with using his system? It’s obviously working for him. I actually bought one of the books he mentioned to do MODD. Also, because I just love reading about different ways to approach investing and trading.

I think you’re being a little too critical on his approach to the markets, when there are people who are more risk averse out there than others. And even though companies like SHOP and TSLA have out performed the markets by a factor of 8-10+, there has been more risk in holding those companies.

Originally Posted by mispoken

No confusion. What you’re saying is true, the common thread (Elon) is the investment. When SpaceX IPOs I’ll be first in line for that stock too, hoping to get a crack at it in MicroVentures before IPO, actually.

Originally Posted by TED74

I don't think much about the market. Don't day trade. Have a brokerage account but don't use it. I dollar cost average my money into my 401k, max out the 415c limits / personal limits, have two kids' college half-funded through Post-9/11 GI Bill (plus some 529 money) and have one rental house that generates minimal income (principal still being paid down). I'll also have a little mil retirement at 60 and an even smaller civil service retirement at 62.

Anyone care to quantify what I'm missing by not diving into all this stuff you folks are discussing here? I like to learn new hobbies and new skill sets, but this sounds like a time-suck I'd rather not take on. Am I in for major regrets when I retire in 15 or 20 years, or beyond? The very basic retirement calculators tell me I'm "ahead" when mapping current retirement savings vs age (even without considering any pension funds), and my finance guy says he's happy with my trajectory toward "work optional." What do y'all money home-brewers say?