I hesitatingly admit to just having bought Sep’22 Calls DDOG+CRWD+ZS+S. I agree with everybody (Warren, Charlie etc.) claiming this market is a Casino. I am living proof. Please do not excommunicate me.
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I’m buying what Warren and the two T’s are buying. My largest holding by far is BRK : )
Second largest holding is cash…to buy more BRK, when people stop asking “Is this the Bottom?”
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I bought some goog, intel, qqqe. I bought a very little bit of DOUG simply because that is my name and I’ve done well doing day trades for entertainment. I recently sold off the last of the XOM I bought in the $30’s. I don’t know the ins and outs of oil company cash flow but I spent 40 years finding and producing oil and there are huge volumes available at this price.
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Things I have been buying (posting these on the Falling Knives board)
- Amazon
- Disney
- QQQE
Carmax has also been discussed - but so far I have passed on this idea.
tecmo
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Late today I bought some GOOGL, INTC and ASML. A good indicator that they’ll all go down another 20%.
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What’s your take on the odds on a recession coming next year?
Stocks like Coke and Walmart are recession plays. Coke is a low cost luxury. Easy to treat you and yours when other luxuries are out of reach. Ditto Walmart anticipates people cutting back due to inflation or recession.
Not growth stocks but likely to be ok.
Recession - I don’t like to make macro forecasts. But it seems fairly possible that there might be a recession of some size. What does it mean for the direction of the market if there is a recession? I don’t know. Down would be perhaps more likely than up, but not a certainty.
Coke and Walmart - just as I don’t like to make macro forecasts, I don’t like to make macro plays; not one, but two dimensions of predictions both have to be correct for things to work out and I have no special predictive powers with either one. With that said, I don’t see why under any macro circumstances, stocks that I think are meaningfully overvalued at their current prices should be relied upon to go higher into even more overvalued territory over a short time horizon to make an investment idea work out.
If I thought they were substantially undervalued and there were no better opportunities out there, then sure, I might be buying them. It all comes down to my own assessment of what they’re worth. Your assessment might be different. You might be right and I might be wholly wrong.
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I’m buying time. 
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Though I’m not currently a holder or a buyer, I note that Brookfield Asset Management (BAM) at $46.31 is 26% off its 52 week high.
And below where I might estimate the price “should” be these days.
The reason I mention it:
Many people tend to underappreciate that inflation is quite good for their business.
They get to the point of appreciating that they have a lot of debt and that interest rates are rising.
But don’t get to the next steps of noticing that their current debt load is essentially all fixed rate, so inflation erodes the burden of the debt principal.
And that inflation has risen more than interest rates have, so real interest rates have been falling–their real interest burden is falling, not rising.
One might expect a lot of rate bumps in their lease and operating agreement contract renewals.
No doubt they have some offices that are emptier than one would like, but that will pass.
And some dud malls, but not enough to make a material dent to the parent firm.
They knew they were duds when they bought them, so at least some of that dudness was in the price.
Jim
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Though I’m not currently a holder or a buyer, I note that Brookfield Asset Management (BAM) at $46.31 is 26% off its 52 week high.
And they have a distant cousin in UK: Legal & General
Established in 1836, Legal & General is one of the UK’s leading financial services groups and a major global investor, with international businesses in the US, Europe, Middle East and Asia. With almost £1.3 trillion in total assets under management, we are the UK’s largest investment manager for corporate pension schemes and a UK market leader in pension risk transfer, life insurance, workplace pensions and retirement income.
And like BAM the management likes to compare itself with leading US asset managers like BAM, BLK and makes a case for being valued on par with them.
https://group.legalandgeneral.com/media/gagihm1h/investment-…
Dividend yield now over 8% for those who care about that sort of stuff.
Actually asset managers like BLK and TROW are worthy of consideration too. Valuation has been crushed, TROW at forward PE of 11 and BLK 15. Steady growers with the market, and even in the worst markets like 2009 make profits. As long as equity markets grow in 7 out of 10 years, they should do well. Even when they don’t they will make money, though less, on other assets, like bonds.
I have dipped my toes and bought LGGNY, and added to TROW and BLK.
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What is bull case on GOOGLE besides great Co, great economics, attractive price?
Munger once called it the greatest moat he has ever seen.
Not buying anything … yet.
Heck, we’re not even in bear market territory yet, as least for the S&P. (The Nas is off 25%, so, yeah.)
There’s a way whole lot of excess to be wrung out, the silliness of NFTs and crypto demonstrates that almost as much as the goofy people running around saying “values don’t matter” and legions of small timers ganging up on already dead stocks to rescue them from … what? How much excess? I don’t know, but people are paying hundreds of millions for a painting (it’s not even a painting! It’s a print!) and housing is starting to cool, but “starting” isn’t “cooled.”
Not that any of that frothy nonsense will go away completely, but the market regularly corrects irregularly, and this is it. If you don’t want to pay attention to macro, well OK, that’s on you, but with occasional exceptions playing marbles during an earthquake probably isn’t the best use of your skill.
Nobody says a bear stops at 20%. Could be more. Sometimes it’s a lot more.
Patience.
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What more is required by you for a solid investment case?
What is bull case on GOOGLE besides great Co, great economics, attractive price?
Hmm, that’s a pretty good case isn’t it?
They typically trade in a range of 5x to 8x TTM revenue; if you can buy at 5x and sell at 8x you will do very well. TTM Revenue is $283B, so its trading at $1520B which is 5.3x. I am confident we will see 8x sometime in the next 5 years (at a higher revenue as well).
A potential target : $400B x 8 = $3200B, lets call it a double from current levels.
tecmo
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I bought a few shares of PHYS yesterday with some dividends I received in that account.
For $14.5499.
Interesting because my limit order was for $14.55, so TDAmeritrade got me a better price than I expected. I bought so few shares that the difference does not really matter.
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<Heck, we’re not even in bear market territory yet, as least for the S&P. (The Nas is off 25%, so, yeah.)>
It feels like 2008, when the market was very nervous, there were frequent swings of 2-5% a day
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Added a bit:
GOOGL
BRKB
AAPL
KMX
ATVI (new buy)
10% Cash
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I see GOOGL as being the first choice ahead of BRK…WHY? What is the variant perception?
Some say it is the new ATM because it is the market and will be sold
Been buying both GOOGL and MSFT over the last 3 weeks or so, nibbling on the way down.
I’m currently underwater on both, more so on GOOGL, the larger position.
RMarkic
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I think the bear thesis is companies like Google is paying employee compensation using a lot of stocks, so now they will need to issue even more to keep employees from leaving to startups etc.
But I think the real reason is some funds are getting investors withdraw. Maybe the tiger fund. Maybe it’s liquidating.
I think the bear thesis is companies like Google is paying employee compensation using a lot of stocks, so now they will need to issue even more to keep employees from leaving to startups etc.
I think this is valid - but not as much as it would seem for google, basically any stock grants / RSU’s in the last X years are worthless, you can get a new position at a new company which refreshes grants at the current price when you start, so you’ll get RSU’s like 100% of your salary, which have value and are more likely to pay off since you moved after the drop. Google really hasn’t dropped that much though, so the options should be sorta okay-ish, you’re not even really losing a year at this point. I’ve noticed that software developers are extremely greedy though, so you never know. Amazon you’re losing 2 years and have very modest growth for 5 years for example. Also, all these SaaS stocks are going to feel this 10x.
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