# POMO that hurts

When you are half in cash, POMO is bittersweet.
Half of you hates the world.
The other half is like “yes - go lower…bwahahaahaaha!”

So you just hate yourself.

I love you, POMO.
I hate you right now, POMO.

-Conflicted Dreamer

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I hate you right now, POMO.

Or, you could be in UPST. Even my \$77.77 is under water.

Let me see. 4th Q adjusted blah blah EPS was \$0.89. Running almost \$3.60 annual if there is no growth. Selling at \$76 right now. p/e 21.1. 10-year treasury yield 2.87%. Invert .0287 → 34. Graham’s margin of safety…

KC

Selling at \$76 right now. p/e 21.1. 10-year treasury yield 2.87%. Invert .0287 → 34. Graham’s margin of safety…

I was told there would be no math.

Can you elaborate on what the “34” means? Good/bad…not really sure how to take that?

Dreamer

Can you elaborate on what the “34” means? Good/bad…not really sure how to take that?

Gee, this is just like an investing board. Thought it was social

If you take the 10-year treasury yield, which is sort of an alternative to “speculating” in stocks…, and 10 years is the investment time frame for any true (buy and hold) stock investor… you calculate 1 divided by the 10 year yield, 1/.0287 or whatever, and that is 34. It is sort of the “p/e” for the 10-year treasury. So that is the “risk free” p/e equivalent, 34. So, deep breath, the safety factor is 34/21.1=1.61 or 61% safety factor. I think Graham looked for 1/3 safety factor.

Unless the business is going to Hell, or interest rate is going to 5%, or both, the price looks compelling. If you hold for a longer-than-Saul period of time there should, eventually, be green numbers. Of course at 80, the other principle can be considered, “in the long term we are all dead”.

KC, who added another 500 shares tonight (why am I up at 2 am?) That, is another story.

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I don´t know what “34” means, but when (UPST) one of the most (bullish) discussed stocks on Saul´s goes from \$400 to \$73, and every tech portfolio is deep in the red, things don´t look good at all.
The war, the high inflation, the self-made energy crisis, the weak European politics, Joe Biden and the Dems, are all reason enough to start worrying.

For all those invested in tech the losses are getting worse every day.

And those who hope that the stocks will come back fast and hit again soon their ATH are just…dreamers!
Is it too late to short the market?
Maybe not.

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Of course at 80, the other principle can be considered, “in the long term we are all dead”

They say that 80 is the new 65.
Of course, “they” also said GLBE at \$30 was a steal, so…hmmm.

For that amount of math and investing jargon, I am not sure whether you should be banned or exalted. Maybe both.

Loyal lurkers! Perhaps one of two of you most fervent lurkers (not the lazier ones) should make a WAFTT Knowledgebase. If you do, please note KC’s previous post for some sort of undefined notoriety that is tbd.

-Dreamer

the losses are getting worse every day

Yep. Yup. And every hour. Ya.

So I’m up at 3:11 a.m., watching Cleveland and now buying like 10 shares at a time. \$72.64. WTF?

Kwanie 1 for 2, a walk, 2 runs and a rbi and a nice backhand over-the-shoulder catch.

KC

So I’m up at 3:11 a.m

Don’t you trip over the giant piles of rice, in the dark?

Dreamer <— thinks about these things

POMO you sly devil you!

Still waiting for the following to capitulate much further:

DDOG, NET, ZS, NVDA

Some that already hit my “thought that was as low as it would go…crap.” list:

GLBE, UPST. (maybe add ROKU here, and honorable mentions to SE, SHOP, FB, TWLO, NFLX, etc…)

Some that I didn’t really have a “buy at this price” price but which maybe I should start thinking about it:

DIS, F, MGNI?, STEM, OLO

File under “remember these guys?”:

ZM, LSPD, FUBO, VYGVF, ASAN, MNDY, etc

I have some cash, but not enough stocks at my ideal prices.
Likely we bounce and I regret not pouncing, but all we have done YTD is keep testing and beating the lows.

And we haven’t had a single Fed rate raise yet.

Dreamer

4 Likes

More POMO that hurts today.

Would be enjoyable if in all cash, for sure. Would be epic!

When nothing goes right, maybe end is near.

But then, they would say, it always gets worse than you think. Hmmm.

Just need NVDA, TTD, DDOG, and NET to stop messing around and just collapse like the others, into more reasonable valuations. I am not talking 10 P/E type stuff, just not bloated multiples.

Let’s get to early 2018 or Dec 2018 type multiple numbers, at least, and then we can start talking about bottoms.

Would be especially nice for mega cap to really really implode, as those would likely be easy to ride up for modest gains.

Dreamer

What’s a good multiple for you on NVDA? It’s already at a forward 25-30 now.

As for EV/S on SaaS, what do you think is not over bloated? I figure 10-20 is reasonable in this environment depending on potential.

20 p/e

The metaverse wont explode overnight and AVs taking longer than expected.

Growth probably slows a bit in coming Qs.

Call it \$100 price target.

I am not talking 10 P/E type stuff, just not bloated multiples.

Using market cap and not enterprise value because it is easy to find, I make DDOG at 19, ZS at 16 and CRWD at 15. Not low enough?

And then, please check this, MNDY at 9 and BRZE at 8. AFRM has the b/s revenue number so the 2.8 is mega-bogus. Bert has waxed poetic over BRZE at a higher price. MNDY’s non-essentialness will make a p/s of 9 still not interesting.

I think I will look closely at BRZE and MNDY.

KC

At the rate NVDA is going, could hit \$100 next week. The trend is your friend.

KC

1 Like

I bought NCNO at\$24.35 (0.67% of port, wheeee)
BRZE at\$27.83 0.64%
MNDY at \$ 90.66, 0.99%

Major move, huh?

Risk on! A sustained, almost 1 hour long rally. Dreamer, speak to me, Oh Seer Thee, Stock Whisperer.

KC

Using market cap and not enterprise value because it is easy to find, I make DDOG at 19, ZS at 16 and CRWD at 15. Not low enough?

Those are forward multiples?

DDOG set to do \$1.6b, still \$30b mkt cap. So that must be a forward multiple.

Dreamer

Some timely sells yesterday after all.
Still hurts a bit though.

I love you, POMO…but I am also giving you the ol’ side-eye. With a smirk. And a questioning look.

Dreamer

Dreamer,

Speak to me words of SPG. Not low enough? I dipped me toe in. Idle hands and all that… The parallel here is that Home Depot and Lowe’s reported better than Walmart and (shudder) Target. The former sell to the landed gentry, homeowners. The latter cater to the unwashed masses. SPG should do relatively well. ???

KC

for the newbies: POMO = Pleasure of Missing Out aka you are happy market (or a stock) is down because you are in cash, etc…

KC - regarding SPG:
My caveat is “I don’t know what the market thinks is a good price right now. For anything.”

As far as their recent ER/CC, it is here;
https://www.fool.com/earnings/call-transcripts/2022/05/10/si…

CEO David Simon is a stud.
Business was going very well. He argued they are traditionally 15x FFO or something like that, and yet they are only 10 or 12 at moment. Point is, he was saying they are undervalued.

All their acquisitions doing well (JCPennys, joint vehicle SPARC with Authentic Brands, etc)

Leasing had never been stronger. This makes sense because the weak had already been weeded out with covid, right? Every tenant left standing WANTS to be there.

They raised divvy, again.
They raised forecast. (in this environment, impressive)

Could the price go to \$90? To \$80s? Dunno. I feel like, if this recession/downturn/bear ends before EOY, that their price will be at or above current price, so I feel it would only be paper losses with dividends along the way. I would be annoyed that I could have gotten in cheaper, but I may pare some of the stock after the ex-div date coming up, IF we catch a good bear market rally, but currently the stock is going against me, so I probably just hold.

Keep in mind that in previous economic downturns (GFC and Covid) their stock collapsed. Both times rebounded hard. Of course, covid was unique with indoor closures/masks. Covid could still be a wild card this coming Winter. Which is why I may unload some before Summer ends. If I want two dividend payouts, I probably have to hold thru early Sept is my guess. That could be a confluence of both market upturn and covid upturn…so who knows.

Anyway, some excerpt…good luck!

"
The number of tenant terminations in the first quarter was the lowest recorded in the last five years. And our TRG portfolio occupancy was 93.2% at quarter-end, average base minimum rent increased compared to the fourth quarter and was \$54.14. Leasing momentum continued across the portfolio. We signed more than 900 leases for more than 3 million square feet in the quarter and had a significant number of leases in our pipeline.

n fact, at our recent leasing deal committee, we approved the most deals since 2016 and overall, we recently have approved approximately 500 new deals representing 2 million square feet. Demand is very strong and interesting with the volatility of the world, our portfolio in the U.S. is in great demand from worldwide brands, restaurants, and entertainment operators, as most retailers and tenants view the U.S. as the place to be.

Sales momentum continued for our retailers, mall sales volume for the first quarter were up 19% year over year, we reported retail sales per square foot reached another record in the first quarter at \$734 per square foot, for the mall and outlet combined 43% increase and 669 per square foot for the Mills, which was a 50% increase. TRG reported 1,038 per square foot, which was a 52% year-over-year increase. Our occupancy cost is the lowest that we’ve had in seven years. We are pleased with the results of our other platform investments in the first quarter, including SPARC Group and JCPenney.

JCPenney’s liquidity position is strong at \$1.3 billion and it has no borrowings on its line of credit and performed better than planned. I can say the same for SPARC, which also performed better than planned in the quarter. SPARC also completed the U.S. Reebok transaction, and we anticipate great things from this iconic brand.

When we look at the valuation of our stock today at an FFO multiple of approximately 10 times relative to the historical valuations closer to 15 times, and an applied cap rate of around 7% for our real estate assets, we see substantial value in our stock, particularly given our belief and conviction in our future growth opportunities. Our balance sheet is strong, continues to be a significant advantage for us while our cash flow generation provides us with the flexibility to adapt as conditions warrant and as we have proved countless times. We will be thoughtful and opportunistic on the buyback and keep in mind, this is in addition to the more than 20% increase in our dividend we announced today. Now, given our outlook for the remainder of the year, we are increasing our full year 2022 comparable FFO guidance from \$11.50 to \$11.70 per share to \$11.60 to \$11.75 per share, which compares to our comparable number of \$11.44 last year.

This is an increase of \$0.10 at the bottom end of the range and \$0.05 at the top or an 8% increase at the midpoint. This does not include the previously mentioned unrealized loss or gain that may occur the rest of the year on our fair value of investments that I mentioned and please keep in mind that this guidance increase comes in the face of a strong U.S. dollar and rising interest rates.

We also announced today that our board of directors has authorized a new common stock repurchase program for up to \$2 billion that will become effective on May 16.

Dreamer

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Re: SPG

As always, depends on context. I am trying, with this one, to not worry too much about what Mr. Market thinks on a Friday morning. I have this broad brush plan of three legs to my portfolio. First in fintech, meaning mostly UPST and AFRM, with room for some others. Second is observability/security space. Third third is diversity and a longer timeframe. Thus, the interest in SPG. You laid out the (?) 2-year case. I screened dividend stocks. I have a penchant for doing this, but I never act because the lure of 5% dividend isn’t so shiny when the chart shows 20% price drop now and then. The CNBC premarket page had a Cramer bit on something like “accidental value stocks” or “accidental dividend stocks”. Stocks with pedestrian dividends that have been crushed to create high dividends. Even when I was at ATH, I couldn’t pull the trigger to go to dividend stocks. The specter of declining portfolio value as I withdrew 5%, 6%, 7% annually did not appeal.

Right now we have DOW at 4.06%, Citi at 4.14%, Big Lots at 4.14%, Best Buy at 4.65%, American Eagle Outfitters at 4.98%… I didn’t go further down the alphabet. I did sample the SPG, though I didn’t inhale.

Argh, I have visitors. One with facemask, for God’s sake. F’ing “tour bus” must have pulled in.

Later,

KC