2 ms·

I think there's some panic, yea, but the P/E doesn't tell the whole story. Take Facebook or maybe Google (just to pick on, others like Apple have their own head

I think there's some panic, yea, but the P/E doesn't tell the whole story. Take Facebook or maybe Google (just to pick on, others like Apple have their own headwinds to face) - how does advertising fair in a recession? Maybe the P/Es have retracted to look appealing, but here in about 2 years when ad revenue is down 30% those same P/Es look expensive. Personally I think if you are investing with a longer-term horizon the next few years don't matter and if you like to buy individual stocks now is as good of a time as any. Not a financial advisor and not financial advice.

r0m4n0 5y ago
Google has been around for 20 years so we can see what happened to advertising revenue during the last recession. https://www.statista.com/statistics/266249/advertising-revenue-of-google/ https://www.statista.com/statistics/266249/advertising-reven...
- ericmay 5y ago
  Which is definitely a piece of data to look at while making an investment decision. One thing I'd recommend is asking how was Google as a company different in say, 2008 where revenues increased despite the recession compared to now.
  - disgruntledphd2 4y ago
    Google was the cheap competitor to TV last recession. That's definitely not true anymore.
megaman821 5y ago
What about a recession would cause FB or Google to leave the advertising business, and not have some the largest advertising revenue whenever the recession is over? It is more of a choice can your money be invested somewhere better in the short-term and then hop back on to FB and Google before they get too expensive. It is probably the same for all large tech companies. I don't see any titans falling in the next few years.
- ericmay 5y ago
  > What about a recession would cause FB or Google to leave the advertising business, and not have some the largest advertising revenue whenever the recession is over? I'm not suggesting they would leave the advertising business, I'm suggesting revenues could be lower as advertisers cut their spend, which would drop Google/FB revenue and make the current 12 PE more like a 25 during a recession. I guess, you can't just look at P/E ratios. They don't tell you too much. > I don't see any titans falling in the next few years. Well, they've fallen quite a bit since January. Haven't they? I don't see anyone going bankrupt or anything, so if that's what you mean then yea sure I agree - hence I think they're attractive to buy now as well.
- prepend 5y ago
  They wouldn’t leave the as industry, but their revenue would suffer greatly. A decent percentage of Google ad spend is waste/useless/whatever. So during a recession companies are probably tightening their ad spend and getting more precise.

r0m4n0 5y ago

Google has been around for 20 years so we can see what happened to advertising revenue during the last recession. https://www.statista.com/statistics/266249/advertising-revenue-of-google/ https://www.statista.com/statistics/266249/advertising-reven...

ericmay 5y ago
Which is definitely a piece of data to look at while making an investment decision. One thing I'd recommend is asking how was Google as a company different in say, 2008 where revenues increased despite the recession compared to now.
- disgruntledphd2 4y ago
  Google was the cheap competitor to TV last recession. That's definitely not true anymore.

megaman821 5y ago

What about a recession would cause FB or Google to leave the advertising business, and not have some the largest advertising revenue whenever the recession is over? It is more of a choice can your money be invested somewhere better in the short-term and then hop back on to FB and Google before they get too expensive. It is probably the same for all large tech companies. I don't see any titans falling in the next few years.

ericmay 5y ago
> What about a recession would cause FB or Google to leave the advertising business, and not have some the largest advertising revenue whenever the recession is over? I'm not suggesting they would leave the advertising business, I'm suggesting revenues could be lower as advertisers cut their spend, which would drop Google/FB revenue and make the current 12 PE more like a 25 during a recession. I guess, you can't just look at P/E ratios. They don't tell you too much. > I don't see any titans falling in the next few years. Well, they've fallen quite a bit since January. Haven't they? I don't see anyone going bankrupt or anything, so if that's what you mean then yea sure I agree - hence I think they're attractive to buy now as well.
prepend 5y ago
They wouldn’t leave the as industry, but their revenue would suffer greatly. A decent percentage of Google ad spend is waste/useless/whatever. So during a recession companies are probably tightening their ad spend and getting more precise.