3 ms·

Just curious about your statements regarding SQ. Their entire model is that they're a bank (I think they got approved a day or two ago) based on credit-card tra

Just curious about your statements regarding SQ. Their entire model is that they're a bank (I think they got approved a day or two ago) based on credit-card transaction volumes in retail business. Retail businesses are the shadow of SEARS and it is likely to be the slowest segment to recover after this pandemic. So, I am not so sure about SQ - their credit-card gateway isn't as successful as Stripe & Braintree. Personally, I would stay away from any business that depends on retail foot traffic. Also, I would add: EA/ATVI/TTWO: They're outperforming relative to the SPY Innovo/Moderna/etc. : Any of the Cov vaccine companies, a pot pourry of them OLED/LG: LCD/OLED semiconductors And, I would disagree: AMD/INTC/AMAT/KLAC/NVDA/MU: Semiconductors are a solid investment, not beaten down enough because the demand of semiconductors will soar in the future.

adventured 7y ago
SQ will grow much faster than physical retail will decline. Overall physical retail isn't going to vanish. Some parts of it will disappear; some physical retailers will do much worse than others. Their growth over the past three years disputes the concerns on their growth re physical retail. They're not mirroring damage in physical retail: sales, $1.7b -> $2.2b -> $3.3b -> $4.7b. Their operating profit has gone from -$170m -> -$54m -> -$36m -> +$153m. They have a clean path from here to over $10b-$12b in sales (Covid will roll them backwards and or slow their growth dramatically for a while, which of course is why the stock is being priced as it is). NVDA with an optimistic 30 to 40 PE is far beyond a reasonable valuation in this climate. Half that range would be reasonable given their growth potential for the next few years and the market conditions now. So far NVDA is only back to Dec & Nov prices. I love what AMD is doing on the product front and obviously investors are optimistic. Buying them at ~100 times earnings - with modest growth against that valuation - I consider a bad value in this market after the upside run they've had (since ~mar 2018). They still haven't been adjusted with much of a discount (and of course I have no idea if they will be or not at some point), they've merely been priced back to December. A normalization of AMD's valuation to the semi industry requires they earn ~$2 billion in net income at some point to justify their present valuation. They've pulled a lot of future gains forward here.
derision 7y ago
SQ is so much more than just retail businesses. Every haircut I've gotten in the last few years was charged through square, many of the small business restaurants use square, etc etc

adventured 7y ago

SQ will grow much faster than physical retail will decline. Overall physical retail isn't going to vanish. Some parts of it will disappear; some physical retailers will do much worse than others. Their growth over the past three years disputes the concerns on their growth re physical retail. They're not mirroring damage in physical retail: sales, $1.7b -> $2.2b -> $3.3b -> $4.7b. Their operating profit has gone from -$170m -> -$54m -> -$36m -> +$153m. They have a clean path from here to over $10b-$12b in sales (Covid will roll them backwards and or slow their growth dramatically for a while, which of course is why the stock is being priced as it is). NVDA with an optimistic 30 to 40 PE is far beyond a reasonable valuation in this climate. Half that range would be reasonable given their growth potential for the next few years and the market conditions now. So far NVDA is only back to Dec & Nov prices. I love what AMD is doing on the product front and obviously investors are optimistic. Buying them at ~100 times earnings - with modest growth against that valuation - I consider a bad value in this market after the upside run they've had (since ~mar 2018). They still haven't been adjusted with much of a discount (and of course I have no idea if they will be or not at some point), they've merely been priced back to December. A normalization of AMD's valuation to the semi industry requires they earn ~$2 billion in net income at some point to justify their present valuation. They've pulled a lot of future gains forward here.

derision 7y ago

SQ is so much more than just retail businesses. Every haircut I've gotten in the last few years was charged through square, many of the small business restaurants use square, etc etc