5 ms·

https://archive.ph/Q26mN https://archive.ph/Q26mN

by kss238 4y ago

danielfoster 4y ago
-50% is still a better return than many tech stocks.
- melling 4y ago
  Perhaps listening to Warren Buffett explaining how companies are businesses, and how you are buying part of the company will help explain the difference. For example, when Meta P/E was 9, people should have said to themselves “hey, that’s an incredible opportunity”, rather than waste all that time hating on the company. Crypto could recover if enough people “believe“ but there’s no real business
  - djbebs 4y ago
    The peoblem with meta was never the quality of the business. It was with your ability to extract value and control from it. The reason meta is uninvestible is because they are a clear cut case of structurely unsound corporate governance.
    - melling 4y ago
      Different opinions. That’s what makes a market. You saw one thing and I focused on other aspects. We don’t need to convince each other. The market will tell us who is right.
      - free_hacker2 4y ago
  - thunky 4y ago
    > For example, when Meta P/E was 9 Is there something special about the number 9? Wondering why you waited to buy at 9 but 10 was no good.
    - melling 4y ago
      I don’t have a magic formula and I’m often wrong. Meta dropped 20% in one day and I saw an opportunity. https://www.bbc.com/news/business-63406803.amp https://www.bbc.com/news/business-63406803.amp The stock did continue lower and I certainly didn’t get the bottom. All I’m saying is take the emotion out of it and try to be open minded. Hating on a company has little value. At P/E of 9 there’s a safer margin Also, I didn’t say Buffett would buy META. He’s not really a tech investor.
      - thunky 4y ago
        > take the emotion out of it It doesn't sound like you did that, though. You responded to a drop in share price rather than fundamentals. As you just said, it really had less to do with the number 9 and more to do with the number 20. But if you thought Meta was a good investment at PE 10 or higher, I'm not sure why you wouldn't have already owned it. Now that the PE is back above 10, does that mean you're selling it?
    - prewett 4y ago
      9 is the recent low, but presumably GP would consider 10 to be a good deal, too. Typically companies with a solid future making a reasonable profit are about 20 - 30; historically META is about in this range. If META still has "normal" prospects, then it is pretty undervalued. However, this is not a Buffett view on things, as he evaluates based on intrinsic value rather than P/E. He also avoids tech companies because it's hard to figure out what their intrinsic value is. KO (Coca-Cola) for example, is going to grow about as much as GDP, it has a long history of 30% net profit, it has a huge moat so the dynamics of the company aren't likely to change. Thus one can actually attempt to evaluate its intrinsic value: what would you pay for a bond that earned 30% every year? Do the present value calculation and there you go. But what is META's prospects 10, 20, 30 years from now? Hard to say, and the social media landscape keeps changing. So Buffett would not invest in META--a P/E of 9 might be a steal, but it might also be an indication that the prospects of the company are no longer so positive as they were two years ago. (AAPL is a notable exception to Buffett not investing in tech, because of how their products reinforce each other to create a large moat. At this point I think it is also fairly likely that Apple will be around making computers for the foreseeable future--even OS 9 didn't kill them off, and now they have market leading hardware and a solid OS and compelling ecosystem. In this way of thinking, one could argue they have similar dynamics as KO, but with the advantage that they have growth prospects. They also are returning 30% to shareholders, mostly in the form of huge stock buybacks. Hence Buffett has been a massive buyer of AAPL recently.)
  - HWR_14 4y ago
    > when Meta P/E was 9, people should have said to themselves “hey, that’s an incredible opportunity” AFAIK, Meta doesn't pay dividends. So Buffet (or Gates, who is Buffet but likes tech) would steer clear.
    - melling 4y ago
      That’s an incorrect statement. Buffett doesn’t buy companies because of dividends. In fact, he’s not a fan of them. https://www.investopedia.com/ask/answers/021615/why-doesnt-berkshire-hathaway-pay-dividend.asp https://www.investopedia.com/ask/answers/021615/why-doesnt-b...
  - nocoiner 4y ago
    Why is that an incredible investment opportunity? Something like ~53% of the voting power is owned or controlled by Zuck, and there’s no indication that he has any plans to meaningfully return money to shareholders,* rather than continuing to write ten-digit company checks every month to fund the metaverse. If you want to buy META as a bet on Zuck himself or the success of their conception of the metaverse, that’s one thing, but I don’t see how this is a reasonable value investment based on their current management and capital structure. * I know Meta has done stock buy-backs from time to time, which are of course economically equivalent to a dividend (except more tax efficient), but from eyeballing their history of repurchases, it looks like they, like many issuers, managed to set billions of dollars of shareholder money on fire by repurchasing the stock while it was trading at rich multiples.
    - ianai 4y ago
      Stock buybacks aren't equivalent to dividends if the stock subsequently loses that value. Then it's much worse than a dividend.
  - bionsystem 4y ago
    Why are you looking at trailing PE ? You are buying future profits, not past ones. (And btw, Zuck has already told his shareholders that he has no near-term plan for the profitability of his investments.)
  - AmericanOP 4y ago
    People arent betting against facebook’s p/e today, they are betting against it tomorrow. If you remain convinced facebook is a utility, good job to someone.
  - itsoktocry 4y ago
    If the E goes down substantially, is it an incredible opportunity?
- doorman2 4y ago
  Let's say all the money is in BTC, which is down 74% YoY. If you started with $100, you'd have $26. And then you lost half of it, which brings you to $13. So you'd be down 87%, which is on-par with many tech stocks.

https://archive.ph/Q26mN https://archive.ph/Q26mN

by kss238 4y ago

https://archive.ph/Q26mN https://archive.ph/Q26mN

danielfoster 4y ago

-50% is still a better return than many tech stocks.

melling 4y ago
Perhaps listening to Warren Buffett explaining how companies are businesses, and how you are buying part of the company will help explain the difference. For example, when Meta P/E was 9, people should have said to themselves “hey, that’s an incredible opportunity”, rather than waste all that time hating on the company. Crypto could recover if enough people “believe“ but there’s no real business
- djbebs 4y ago
  The peoblem with meta was never the quality of the business. It was with your ability to extract value and control from it. The reason meta is uninvestible is because they are a clear cut case of structurely unsound corporate governance.
  - melling 4y ago
    Different opinions. That’s what makes a market. You saw one thing and I focused on other aspects. We don’t need to convince each other. The market will tell us who is right.
    - free_hacker2 4y ago
- thunky 4y ago
  > For example, when Meta P/E was 9 Is there something special about the number 9? Wondering why you waited to buy at 9 but 10 was no good.
  - melling 4y ago
    I don’t have a magic formula and I’m often wrong. Meta dropped 20% in one day and I saw an opportunity. https://www.bbc.com/news/business-63406803.amp https://www.bbc.com/news/business-63406803.amp The stock did continue lower and I certainly didn’t get the bottom. All I’m saying is take the emotion out of it and try to be open minded. Hating on a company has little value. At P/E of 9 there’s a safer margin Also, I didn’t say Buffett would buy META. He’s not really a tech investor.
    - thunky 4y ago
      > take the emotion out of it It doesn't sound like you did that, though. You responded to a drop in share price rather than fundamentals. As you just said, it really had less to do with the number 9 and more to do with the number 20. But if you thought Meta was a good investment at PE 10 or higher, I'm not sure why you wouldn't have already owned it. Now that the PE is back above 10, does that mean you're selling it?
  - prewett 4y ago
    9 is the recent low, but presumably GP would consider 10 to be a good deal, too. Typically companies with a solid future making a reasonable profit are about 20 - 30; historically META is about in this range. If META still has "normal" prospects, then it is pretty undervalued. However, this is not a Buffett view on things, as he evaluates based on intrinsic value rather than P/E. He also avoids tech companies because it's hard to figure out what their intrinsic value is. KO (Coca-Cola) for example, is going to grow about as much as GDP, it has a long history of 30% net profit, it has a huge moat so the dynamics of the company aren't likely to change. Thus one can actually attempt to evaluate its intrinsic value: what would you pay for a bond that earned 30% every year? Do the present value calculation and there you go. But what is META's prospects 10, 20, 30 years from now? Hard to say, and the social media landscape keeps changing. So Buffett would not invest in META--a P/E of 9 might be a steal, but it might also be an indication that the prospects of the company are no longer so positive as they were two years ago. (AAPL is a notable exception to Buffett not investing in tech, because of how their products reinforce each other to create a large moat. At this point I think it is also fairly likely that Apple will be around making computers for the foreseeable future--even OS 9 didn't kill them off, and now they have market leading hardware and a solid OS and compelling ecosystem. In this way of thinking, one could argue they have similar dynamics as KO, but with the advantage that they have growth prospects. They also are returning 30% to shareholders, mostly in the form of huge stock buybacks. Hence Buffett has been a massive buyer of AAPL recently.)
- HWR_14 4y ago
  > when Meta P/E was 9, people should have said to themselves “hey, that’s an incredible opportunity” AFAIK, Meta doesn't pay dividends. So Buffet (or Gates, who is Buffet but likes tech) would steer clear.
  - melling 4y ago
    That’s an incorrect statement. Buffett doesn’t buy companies because of dividends. In fact, he’s not a fan of them. https://www.investopedia.com/ask/answers/021615/why-doesnt-berkshire-hathaway-pay-dividend.asp https://www.investopedia.com/ask/answers/021615/why-doesnt-b...
- nocoiner 4y ago
  Why is that an incredible investment opportunity? Something like ~53% of the voting power is owned or controlled by Zuck, and there’s no indication that he has any plans to meaningfully return money to shareholders,* rather than continuing to write ten-digit company checks every month to fund the metaverse. If you want to buy META as a bet on Zuck himself or the success of their conception of the metaverse, that’s one thing, but I don’t see how this is a reasonable value investment based on their current management and capital structure. * I know Meta has done stock buy-backs from time to time, which are of course economically equivalent to a dividend (except more tax efficient), but from eyeballing their history of repurchases, it looks like they, like many issuers, managed to set billions of dollars of shareholder money on fire by repurchasing the stock while it was trading at rich multiples.
  - ianai 4y ago
    Stock buybacks aren't equivalent to dividends if the stock subsequently loses that value. Then it's much worse than a dividend.
- bionsystem 4y ago
  Why are you looking at trailing PE ? You are buying future profits, not past ones. (And btw, Zuck has already told his shareholders that he has no near-term plan for the profitability of his investments.)
- AmericanOP 4y ago
  People arent betting against facebook’s p/e today, they are betting against it tomorrow. If you remain convinced facebook is a utility, good job to someone.
- itsoktocry 4y ago
  If the E goes down substantially, is it an incredible opportunity?
doorman2 4y ago
Let's say all the money is in BTC, which is down 74% YoY. If you started with $100, you'd have $26. And then you lost half of it, which brings you to $13. So you'd be down 87%, which is on-par with many tech stocks.