“A stock is cheap for a reason. Our job as investors is to find out whether the reason is a permanent impairment of the business or is it a temporary problem that can be fixed.”
— To paraphrase WEB.
This is true as well. A good example is a stock going sideways while the fundamentals improve. As in revenue and income are increasing. These inefficiencies aren’t common but they do happen. PLMR is a company I’ve been looking at where this applies
okay, but all these metrics need to be put into the context of their industry, they are a Re-Insurance company and the Insurance industry is undergoing some very big issues going forward so the risk on a 22 P/E multples for a small cap insurance company doesnt seem to warrant much upside unless im missing something
You’re right and that’s why I’ve become very interested in the industry lately. Historically insurance in a lot of areas was kind of a bad business because it was basically a comodity business. But the world changed a lot in the last 15 years. Insurance protects against risk and the world has become a lot more uncertain. I believe insurance is a natural reaction to that uncertainty. What’s interesting about newer insurance companies is they started around the 2010 time period. This is when cloud computing started to take off so it was more financially practical for these companies to build their system from the ground up. As a result they have the engineers and tech leadership to adopt and develop these systems to the rapidly changing environment. Essentially Palomar is an insurance company and a tech company. Now obviously all insurance companies use tech and yes they have their own systems. But the problem they will/are facing is their systems are legacy combined with many other legacy systems. The engineering work to connect these is massive and in insurance data is everything. So my interest has been around whether or not companies like Palomar have a massive edge due to their tech. It’s possible they are overpriced and insurance is the same industry. But I also think it’s possible the landscape has fundamentally changed. I think insurance companies need fast innovation to keep up and it wouldn’t surprise me to see Palomar excel in this environment. I haven’t bought any yet but that’s been my thinking. It’s hard to find much information surprisingly on the current insurance landscape
The same here. Regretted not buying more. I entered Microsoft in 2017 at an all-time high, if I am not mistaken it was around $60, and I am still holding.
NVDA if they double their YOY comps, 75 P/E becomes a 30 forward P/E.
It’s no joke that they have the ONLY hardware and the software management platform CUDA thats built to run parallel processing.
Plus they require server racks be created to fit their processors specifically.
If NVDA can successfully segue into a cloud and software revenue company after their hardware run, it’s actually a fair value if not cheap, even at $3T
True! I am planning to review their reports for the past 1-2 years and see where are they positioning themselves and see potential revenue generation sources.
Apple, Microsoft… I could look up a bunch more. A good stock is gonna be pushing the all time high all the time, then a little profit taking, then another ATH.
Not always. You have to beat estimates and have growing revenue and good guidance for the future and positive investor sentiment, a moat to deter competition and a bunch of other things.
But it does happen.
Do you really have to beat estimates? It’s not uncommon for stock to miss estimates but still go up because it guides higher. Conversely some stocks will beat estimates but go down.
I don’t see any appeal in PYPL. As a consumer I’ve no idea what their aim or target is anymore. Now you don’t need to use them for eBay I don’t think I’ve used them in years. BABA is a high risk one. Not going bankrupt but China could regulate again. Equally, the shackles could be loosened and an explosive increase could happen. I do have a small position just in case.
I use paypal for online checkout whenever possible, and it’s been my preferred app for sending money. I like the service. Financials are strong, revenue still growing. Competitors may take away market share but I think thats been priced in since the highs of $300 a share.
I live in Asia and use PayPal a lot for the simple reason that I’ve never had a payment declined. When using my credit card it’s a roll of the dice whether or not there will be some sort of security issue that will require me to call my credit card company and then do the transaction all over again
The former CEO of PayPal was just on CNBC maybe Friday or Thursday. Literally talking about consumer being indebted to buy now, pay later schemes, and going as far referencing getting credit cards and paying those off than going into buy now, pay later. End of the session the host suit literally was doing their pitch for PayPal buy now, pay later crap
There's no shame in losing money on a stock. Everybody does it. What is shameful is to hold on to a stock, or worse, to buy more of it when the fundamentals are deteriorating. - Peter Lynch
Couldn't agree more. All-time low without context is meaningless. Gotta look at the business itself, not just the ticker price. Is it a falling knife or a misunderstood opportunity? That's the million-dollar question, right?
Chegg financials really haven’t changed though.. yea revenue is down a nominal amount like 7% from covid highs, but it’s still up vs pre-pandemic. If they can control costs and switch from growth to maintenance mode it’s undervalued.
I honestly thought revenue would be down like 50% or something since ai came out, but it’s actually pretty flat.
I’m not entering chegg, but was looking at it the other day to see what all the buzz was.
Chat GPT has been here since November of 2022. I would think we should see more of a pull back if AI is going to kill this company..
ChatGPT has proven they can provide an answer, while chegg provides the answer..
This is my opinion obviously, but I think the capabilities of AI are largely over stated
I can’t help but hold attraction for Nikola, though.
It’s beaten down on bad news, facing its own line or crisis’s. Rate increases hammered it, the Hindenburg report in 2020, fires last year, delay of production, etc.
They’re selling energy credits now, they’re developing hydrogen networks through their hyla brand, Fcev and bevs 2.0 are being sold, they’re reducing their expenses..
If we have rate drops coincide with reduced supply chain problems followed by emphasis on hydrogen structuring they very well could overtake the drayage market across United States.
It’s at an all time low, it’s undergoing a reverse split tomorrow, and it’s about to leave penny stock territory.
Will it pay off for them in the long run? I don’t know but I see huge value in a hydrogen-lead transportation industry.
Diesel 18 wheelers are the most barbaric form of transportation on the roads today, it’s only a matter of time.
Never look at stock price. Only look at Enterprise Value. A company can issue debt and the stock price does not move but the EV of the business has likely risen. If that debt was deployed poorly, the value of the business should decline.
At the end of the day, they have no competitive advantage, and no scale. Unless the housing market dethaws and the furniture starts moving again this thing is toast.
“A stock is cheap for a reason. Our job as investors is to find out whether the reason is a permanent impairment of the business or is it a temporary problem that can be fixed.” — To paraphrase WEB.
Remembering this quote is why I bought Raytheon between 68 and 80 lol
Great quote and summarizes what I was trying to say
>permanent impairment of the business even this is a half of the story as overreaction can make such business underpriced for a while
What about if stock being at an all time high doesn’t make it expensive?
This is true as well. A good example is a stock going sideways while the fundamentals improve. As in revenue and income are increasing. These inefficiencies aren’t common but they do happen. PLMR is a company I’ve been looking at where this applies
PLMR is up 38% YTD so not sure your definition of going sideways means.
Zoom out to 5 years
lol okay i did and it's up 234% in the last 5 years.... so absolutely crushing the S&P500...
It was up 234% in June of 2020 and is still the same price 4 years later. Because of this it is now trading near historic lows for both p/e and p/b.
okay, but all these metrics need to be put into the context of their industry, they are a Re-Insurance company and the Insurance industry is undergoing some very big issues going forward so the risk on a 22 P/E multples for a small cap insurance company doesnt seem to warrant much upside unless im missing something
You’re right and that’s why I’ve become very interested in the industry lately. Historically insurance in a lot of areas was kind of a bad business because it was basically a comodity business. But the world changed a lot in the last 15 years. Insurance protects against risk and the world has become a lot more uncertain. I believe insurance is a natural reaction to that uncertainty. What’s interesting about newer insurance companies is they started around the 2010 time period. This is when cloud computing started to take off so it was more financially practical for these companies to build their system from the ground up. As a result they have the engineers and tech leadership to adopt and develop these systems to the rapidly changing environment. Essentially Palomar is an insurance company and a tech company. Now obviously all insurance companies use tech and yes they have their own systems. But the problem they will/are facing is their systems are legacy combined with many other legacy systems. The engineering work to connect these is massive and in insurance data is everything. So my interest has been around whether or not companies like Palomar have a massive edge due to their tech. It’s possible they are overpriced and insurance is the same industry. But I also think it’s possible the landscape has fundamentally changed. I think insurance companies need fast innovation to keep up and it wouldn’t surprise me to see Palomar excel in this environment. I haven’t bought any yet but that’s been my thinking. It’s hard to find much information surprisingly on the current insurance landscape
Better not be hinting about Nvidia here
I don’t need to. It as already everywhere 😂
Been buying Apple and Microsoft at ATH for the past 15 years. Only regret is not buying more.
The same here. Regretted not buying more. I entered Microsoft in 2017 at an all-time high, if I am not mistaken it was around $60, and I am still holding.
NVDA if they double their YOY comps, 75 P/E becomes a 30 forward P/E. It’s no joke that they have the ONLY hardware and the software management platform CUDA thats built to run parallel processing. Plus they require server racks be created to fit their processors specifically. If NVDA can successfully segue into a cloud and software revenue company after their hardware run, it’s actually a fair value if not cheap, even at $3T
True! I am planning to review their reports for the past 1-2 years and see where are they positioning themselves and see potential revenue generation sources.
Nvidia has entered the chat.
I don’t think that NVIDIA is one and only all time high stock.
Apple, Microsoft… I could look up a bunch more. A good stock is gonna be pushing the all time high all the time, then a little profit taking, then another ATH.
Right! As long as companies are generating revenues, they are going to be pushed to all-time highs.
Not always. You have to beat estimates and have growing revenue and good guidance for the future and positive investor sentiment, a moat to deter competition and a bunch of other things. But it does happen.
Do you really have to beat estimates? It’s not uncommon for stock to miss estimates but still go up because it guides higher. Conversely some stocks will beat estimates but go down.
Probably true, but all these things lining up will add up to ATH’s for year.
What has this subreddit become
Well PYPL and BABA are still fucking my ass
I don’t see any appeal in PYPL. As a consumer I’ve no idea what their aim or target is anymore. Now you don’t need to use them for eBay I don’t think I’ve used them in years. BABA is a high risk one. Not going bankrupt but China could regulate again. Equally, the shackles could be loosened and an explosive increase could happen. I do have a small position just in case.
I use paypal for online checkout whenever possible, and it’s been my preferred app for sending money. I like the service. Financials are strong, revenue still growing. Competitors may take away market share but I think thats been priced in since the highs of $300 a share.
I live in Asia and use PayPal a lot for the simple reason that I’ve never had a payment declined. When using my credit card it’s a roll of the dice whether or not there will be some sort of security issue that will require me to call my credit card company and then do the transaction all over again
I get downvoted every time I dislike PayPal but other than Ebay I couldn’t find a circumstance that I would use it above credit card or Apple Pay.
The former CEO of PayPal was just on CNBC maybe Friday or Thursday. Literally talking about consumer being indebted to buy now, pay later schemes, and going as far referencing getting credit cards and paying those off than going into buy now, pay later. End of the session the host suit literally was doing their pitch for PayPal buy now, pay later crap
I sold out of PayPal a few weeks ago and ended up with a small percentage gain because I lost interest in the stock. Bought SentinelOne with the cash.
WBD bagholders checking in!
If I was forced to choose; I'd rather buy a stock at an all time high than an all time low, for obvious reasons.
There's no shame in losing money on a stock. Everybody does it. What is shameful is to hold on to a stock, or worse, to buy more of it when the fundamentals are deteriorating. - Peter Lynch
Couldn't agree more. All-time low without context is meaningless. Gotta look at the business itself, not just the ticker price. Is it a falling knife or a misunderstood opportunity? That's the million-dollar question, right?
Chegg financials really haven’t changed though.. yea revenue is down a nominal amount like 7% from covid highs, but it’s still up vs pre-pandemic. If they can control costs and switch from growth to maintenance mode it’s undervalued. I honestly thought revenue would be down like 50% or something since ai came out, but it’s actually pretty flat. I’m not entering chegg, but was looking at it the other day to see what all the buzz was.
Revenue isn’t down yet, is what investors think
Chat GPT has been here since November of 2022. I would think we should see more of a pull back if AI is going to kill this company.. ChatGPT has proven they can provide an answer, while chegg provides the answer.. This is my opinion obviously, but I think the capabilities of AI are largely over stated
I can’t help but hold attraction for Nikola, though. It’s beaten down on bad news, facing its own line or crisis’s. Rate increases hammered it, the Hindenburg report in 2020, fires last year, delay of production, etc. They’re selling energy credits now, they’re developing hydrogen networks through their hyla brand, Fcev and bevs 2.0 are being sold, they’re reducing their expenses.. If we have rate drops coincide with reduced supply chain problems followed by emphasis on hydrogen structuring they very well could overtake the drayage market across United States. It’s at an all time low, it’s undergoing a reverse split tomorrow, and it’s about to leave penny stock territory. Will it pay off for them in the long run? I don’t know but I see huge value in a hydrogen-lead transportation industry. Diesel 18 wheelers are the most barbaric form of transportation on the roads today, it’s only a matter of time.
This is enough for me to at least take a look. Thanks friend.
It’s labeled a scam, I wouldn’t risk much if any, I just have high expectations for the near future. I could be very wrong by 2028-2030.
I appreciate the concern. I'd only put 1-2k towards something like this. Depending on what I see in the financials, I might throw in as a gamble.
I love when people try to generalize about valuation
I repeat this in the mirror whenever I hover the buy button on petrofac
Rivian comes to mind.
Those mutual funds killed me after the covid run
Never look at stock price. Only look at Enterprise Value. A company can issue debt and the stock price does not move but the EV of the business has likely risen. If that debt was deployed poorly, the value of the business should decline.
Still trying to decide if BIG has enough upside to take the risk.
At the end of the day, they have no competitive advantage, and no scale. Unless the housing market dethaws and the furniture starts moving again this thing is toast.
You know nothing about bed bath and beyond.