TFK Capitalist Pigs Thread


#2306

It’s definitely gotten very panicky but I’m not sure there’s an issue of substance that you could hang your hat on re: a bear market. The dot com bubble had tech company bubble/overvaluation and 2008 had sub-prime mortgages/dodgy lending. Is there something similar this time? It’s hardly Brexit or US/China squabbling?


#2307

Limousin Heifers futures are always bleak


#2308

You have to discount 2000 as valuations were meaningless when many of the Internet stocks had no earnings. Equities are more overvalued by all metrics (the CAPE ratio is the best) now than 2007, you have to go back to 1929 to find similar levels. The primary argument for a bear market is that we have passed peak earnings for this cycle, and with interest rates rising a lot of companies will struggle to pay their debt obligations (which was largely used for stock buybacks).

http://www.multpl.com/shiller-pe/


#2309

That’s the history of central banks, blowing and popping bubbles since 1913.


#2310

Yeah - I don’t agree with that. Why for example is tech getting walloped when it’s mostly debt free?


#2311

Tech is by far the most overvalued, so if earnings for this cycle have peaked that segment will fall the hardest. Amazon and Alphabet are both getting hammered today as they lowered their sales guidance for the December quarter. If Apple disappoints, I would stay well clear of the Nasdaq for a while. The three biggest issues facing Tech are sales / earnings peaking for this cycle, China meltdown which could turn really ugly, and increased regulation mainly in Europe.

As for debt, I’m talking about the broad market, only 10 of the 500 companies in the S&P 500 are debt free and the S&P by and large represents the most healthy companies.


#2312

We’ll scoop up another couple of houses KP when this bubble bursts.


#2313

Amazon lowered guidance - Alphabet didn’t.

Alphabet missed revenue by growing it 21% q/q instead of 22% or so - hardly the sign of a company in trouble.

I don’t think China or Debt is a factor for either.

Alphabet are on track to be almost 15 p/e next year ex-cash - hardly grossly overvalued for an actual growth stock.

Basically a lot of (American) people have got their knickers in a twist and are retro-fitting fear factors imho. Markets are due a correction, not a crash.


#2314

Christ, it’s like sitting in a HR meeting or a corporate box at the ore.d.s reading some of this management joregon.
I’m determined to insert “retro fitting fear factors” into a work conversation this week.
I did the same with “hopping like sausages in a pan”, but that term has been adopted and is being widely used now and has lost its entertainment value.


#2315

Try “have you considered shoving your thumb up your hole”? the next time.


#2316

A fella down the pub told me that share buy backs were keeping the whole thing floating till now.

Reading up on IBM this morning would lend alot of weight to his theory.


#2317

Not wrong there pal. Big corpos dont know what to do with their cash piles.


#2318

Galway County board need a sugar daddy. We need to invite Tim Cook to the county final in November.


#2319

An oldie but a goodie.


#2320

IBM are fucked. Haven’t a clue what way to go, jumping from one thing to another.


#2321

CAPE is limited imo, especially for tech stocks. It isn’t exactly reasonable to look at Facebook’s earnings back then either.

If we look 10 years prior vs 1929 too, there had not been a crisis in 1919 like 2008, which softened economic performance in the years after.

Not saying it doesn’t have its uses or that we aren’t hitting a ditch. I’d still pile into Amazon though tbh.


#2322

Their IOT and cognitive journey is ending in complete failure anyway.


#2323

The problem is that they are always playing catch up and their service is shit for what they charge. If they focused on a few areas it would be better but all they do is jump from one thing to another.


#2324

What do they even do these days?


#2325

They dont even know