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If you are so sure it's valuation is ridiculous, you should be shorting the stock and put your money where your mouth is. Wework not being public matters, you
by sumedh 7y ago
If you are so sure it's valuation is ridiculous, you should be shorting the stock and put your money where your mouth is.
Wework not being public matters, you can look at the financials of public companies which was my point.
You cannot look at the financials of private companies so no point of commenting what private investors are doing when you cannot look at the same data.
- scarface74 7y agoShorting a stock isn’t just a matter whether it’s going to go down but predicting when it’s going to go down. As Buffett says “the market can stay irrational longer than you can stay solvent”. Private investors don’t care about the fundamentals. They are just hoping to pawn their stake off to the public market to make a profit.
- sumedh 7y agoExactly and in the end the market does become rational, might take some time so coming back to Dominoes are you saying that the market has been irrational for 5 years? > Private investors don’t care about the fundamentals. Exactly which is why there was no point in talking about private valuation.
- scarface74 7y agoIf private investors don’t care about valuations because their time horizon is shorter and they plan to get out and sell to the bigger fool, how is that any different than the public investor? Either way, stock valuation doesn’t determine the viability of a company as a going concern - profitability does. Did anyone think that MS wasn’t a going concern during the decade where it’s stock stagnated? Do any of the major profitable tech companies have a business model that is more less successful based on investor sentiment during the day?
- sumedh 7y ago> stock valuation doesn’t determine the viability of a company as a going concern - profitability does. Have you looked at the EPS of dominos for the last 5 years?
- scarface74 7y agoIsn’t that what I’ve been arguing the whole time - that it was the earnings that made a company viable and not the stock price? I was replying specifically to... “Dominoes stock price in the last 5 years says otherwise.” The comment wasn’t “Dominoes earnings per share in the last 5 years says otherwise”.
- sumedh 7y agoand why do you think the stock price went up for the last 5 years, was it because of the people love to eat pizza which tastes like cardboard?
- scarface74 7y agoAnd if stock price is directly correlated with profitability again how does that relate to Uber and Lyft? Alternatively, how does that explain Microsoft under Ballmer? Revenues and profits went up dramatically during his tenure but the stock price stagnated for years. If stock price was directly correlated to profitability or business viability, Apple wouldn’t have such a low multiple compared to some of other tech darlings.
- sumedh 7y agoIts not directly related but profitability is one of main factor another factor is future earnings which should answer your doubt about Microsoft and Apple.