After announcing adjusted earnings up 50% for the quarter and 40% for the year. That’s why I generally don’t like to invest in companies with huge PE’s. There’s a long way to fall.
17 Likes
Saul,
I would like to share my experience with LNK because it relates directly to things I have picked up off this board and directly to reading and applying knowledge base concepts.
I have been following your board for a while, but not consistently, and usually just to see opinions other than on some of the paid service sites. This spring I dedicated time to read the knowledge base, follow board regularly, and eventually came to apply a lot of what I learned.
I started to examin my portfolio and trimming positions that didn’t “fit” with the investing style I was beginning to form for myslef. Part of that is not investing into companies not generating earnings. Especially if PE is huge. Probably more luck, than timing or anything else, but part of that was first trimming and eventually getting rid of LNKD. It was about a 6-7% position for me at the time.
I can’t say enough how much I attribute this directly to you, others here, and the knowledge base. Rather than half-heartedly doing some research and following paid recs, I have control and a much better grasp on things. It makes it so much easier handling days/weeks/months like we have been going thru. Besides knowing that not so great returns would be looking a lot worse.
I am putting together a post explaining more of my situation, thinking, actions, and results that have come directly from what I have acquired here. Trying to keep it from being a novel tho.
So to you, and everyone here,
Thank You,
Kevin
21 Likes
Same story with DATA, which I feel fortunate to have had a mere 1% in. It’s now .5%. SPLK got it as well, down 23%.
I feel fortunate to have culled most of my speculative stocks some time ago based largely on learnings from this board.
Ironically XPO is one of my 2 gainers for the day though, also speculative.
1 Like
Don’t forget DATA, down a modest 50% after almost doubling analyst estimates, but issuing slower growth projections, and dragging the whole software space with it down about 7% on the day with some individual names in the space down over 20% also.
And the FANG stocks are all rolling over while the only things that seem to catch a bid are the defensive stocks.
The difficulty with selloffs that are this fast is that lots of holders can be forced to sell from margin calls, so ripple effects are likely to spill out over the next day or two… unless another earnings or news landmine shows up before it can stabilize.
On the bright side, sentiment is very bearish… however the indexes are actually in a place of balance with regard to price.
My personal opinion is that we get a bear market rally soon, but that there is still lower to go. It looks like any small excuse will kick off relentless selling. At least there will be good deals further down the road…
1 Like
My personal opinion is that we get a bear market rally soon, but that there is still lower to go. It looks like any small excuse will kick off relentless selling. At least there will be good deals further down the road…
Maybe we just finished the bear market rally 
1 Like
Maybe we just finished the bear market rally
Also quite likely… and if so that was a pretty weak one and would mean things are even worse… not a lot is looking good for adding to positions on the long side yet.
Happy to be wrong about that, but it’s what it looks like to me
After announcing adjusted earnings up 50% for the quarter and 40% for the year. That’s why I generally don’t like to invest in companies with huge PE’s. There’s a long way to fall.
SKX is down 50% from its high. SWKS is down 45% from its high. AMBA is down 71% from its high. Their lower PEs seem to have provided no protection. It’s a rough time to be a small cap growth company, low PE or not.
Fletch
Long SKX, SWKS, and AMBA
42 Likes
Should add that LNKD was down about 31% from it’s high already before Friday’s 44% implosion. Now it’s down 61% from its high…
Prior declines are no protection from further declines either.
What is amazing to me is that a company can technically have an earnings “beat” yet can garner such a response. So in effect, the market has just done a horrible job at pricing the company and stock.
But efficient market hypothesis and all that, lol
SKX is down 50% from its high. SWKS is down 45% from its high. AMBA is down 71% from its high. Their lower PEs seem to have provided no protection. It’s a rough time to be a small cap growth company, low PE or not.
These were not small cap companies.
Small cap is below $2B.
SKX and AMBA were mid cap and SWKS was a large cap. AMBA is now a small cap company after the 70+% drop in valuation.
1 Like
It’s a rough time to be a small cap growth company, low PE or not.
Small cap? Twitter still has a market cap of over $11 billion.
These were not small cap companies.
Small cap is below $2B.
SKX and AMBA were mid cap and SWKS was a large cap. AMBA is now a small cap company after the 70+% drop in valuation.
You are correct, of course. Poor choice of words on my part. What I should have said was, “Clearly PEs have nothing to do with how hard any of these companies have fallen.”
Fletch
3 Likes