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It feels like only 3 months ago I was repeatedly trying to convince HN readers that Meta was a great investment opportunity at a P/E of 9. In fact, it was…: ht
by melling 4y ago
It feels like only 3 months ago I was repeatedly trying to convince HN readers that Meta was a great investment opportunity at a P/E of 9. In fact, it was…:
https://news.ycombinator.com/item?id=33572187 https://news.ycombinator.com/item?id=33572187
Markets aren’t efficient. People are biased and can’t look past them.
There’s quite a bit of knowledge on HN. As a group, we could do much better understanding the markets.
- dangwhy 4y agomarkets are irrational except when it goes up 17% AH ?
- kibwen 4y agoRather, the market is irrational whenever it does anything that I disagree with, and rational otherwise. Trust me, I'm a rational human being.
- dd36 4y agoMarkets measure the tiny fraction of buyers and sellers on a given day and ignore the super majority of holders. It almost feels like length of ownership should be more determinative of price movements than anything else. If long-term holders start selling, it’s concerning.
- rcme 4y ago> Markets measure the tiny fraction of buyers and sellers on a given day and ignore the super majority of holders. Not really. The decision to not sell and to not buy is itself reflective of the price. If a stock is super cheap, people will buy. If the stock is priced fairly or overpriced, few people will buy. Same goes for selling.
- somethoughts 4y agoIt almost feels like length of ownership should be more determinative of price movements than anything else. >> Length of ownership AND relatedly original cost basis. I think a lot of stocks can seem to defy gravity (i.e. high PE and/or high P/FCF) when the founder and the early investors HODL stocks. At $0.0001 per share, HODLing (in say TSLA, META, MSFT, BTC) is easy since there is/was no upfront capital paid in and holding has essentially no cost basis - so there's no need to act like rationally like a later stage investor. >> Founders and early investors can easily own up to 30-50% of the company and really its only when the founder retires/starts diversifying and the founder and early investors start to unload - does price discovery occur on the entirety of the shares outstanding.[1][2][3] [1] Mark Zuckerberg Sold Facebook Stock Nearly Every Weekday Last Year For Almost 11 Months https://www.forbes.com/sites/rachelsandler/2022/01/06/mark-zuckerberg-sold-facebook-stock-nearly-every-weekday-last-year-for-almost-11-months/?sh=5570993f3f71 https://www.forbes.com/sites/rachelsandler/2022/01/06/mark-z... [2] https://techcrunch.com/2013/02/15/zuckerberg-now-owns-29-3-percent-of-facebook-representing-18-billion/ https://techcrunch.com/2013/02/15/zuckerberg-now-owns-29-3-p... [2] Amazon founder Jeff Bezos decreased his stake to 24% from 42% in the first nine years after IPO.
- dd36 4y agoAgree. I think that fully explains all of TSLA’s movement. Mostly HODL but then Elon had to sell into light purchasing. Since he stopped, purchasing again outpaces selling so we get a steady rise.
- blsapologist42 4y agoHow much money did you make by doing this? Talk is cheap...
- endisneigh 4y agoNo one could have predicted they’d buy back such a ridiculous amount of their own stock.
- fshbbdssbbgdd 4y agoReally? Meta bought back less in 2022 than they did in 2021.
- endisneigh 4y agoExactly.
- zenmaster10665 4y agoHuh? I think you are confused. People forget that stock buybacks also created a pool of equity for employee compensation, it isn't just about returning capital tax effectively.
- endisneigh 4y agoThe point is that there was no way to predict the level of stock buy backs announced.
- Dylan16807 4y agoYou said there way no way to predict they could buy back so much. But basing your expectations on 2021 would have done exactly that. So that argument is wrong. If your real/amended argument is "no way to predict the level", as in predicting the exact amount, that's a much weaker argument that has barely any ramifications for investing. The specific amount is generally much less important than going over/under some threshold.
- endisneigh 4y agoIf it was so obvious large quantities of the stock would’ve been purchased even if the price was depressed. Were there any notable investors purchasing large quantities in expectation of this?
- paulpauper 4y agoMarkets aren’t efficient. People are biased and can’t look past them. I think they are efficient most of the time, but there are edge cases that allow for higher risk-adjusted returns than predicted by a purely efficient framework. A notable example is Renaissance Technologies.
- another_story 4y agoIn the last 3 months the entire market has come back up. I have safe agricultural stocks that have risen nearly as much in this time. FB bouncing back and having a low PE doesn't make it a good investment. People are looking longterm at their prospects and where they're dumping their cash and they don't like it.
- kccqzy 4y agoThe S&P 500 is up by about 10.7% in the past three months. Meta is up by 72.2%.
- wintogreen74 4y agounless you timed it perfectly (tl;dr you didn't) Meta was off by way more than the core stocks in the S&P 500 too
- reaperducer 4y agoUnless you quantify how many agricultural stocks are on the S&P, you're not addressing his point.
- acchow 4y agoIncluding the after hours jump today, Meta is up about 92% since Nov 1 (3 months ago)
- fdsjjfds 4y agoEven with that, it's still down by 50% from a year ago.
- xangel 4y agoMeta is up by 100% if you count today's movement.
- steve76 4y ago[dead]
- deleted 4y ago[deleted]
- deltree7 4y agoHN is the worst place for investment. The smarter the people, the bigger the ego and limited the vision. Between ArsTechnica, HN and reddit and you can bet against popular opinions on this. You can also identify cult formation too.
- kruxigt 4y ago[dead]
- dsco 4y agoEven Paul Graham tweeted that crypto had a systemic risk. Bitcoin is up like 30% since that tweet. HN != Financial advice
- majormajor 4y agoSo hard to tell if HN is telling me to buy Bitcoin or to sell Bitcoin, sometime.
- coffeebeqn 4y agoThinking that anyone knows which way Bitcoin or a stock will go in the short term is foolish (unless they have insider info)
- kosievdmerwe 4y agoThis argument is equivalent to saying "Someone told me that Russian Roulette is dangerous, but I didn't die when I played it, so they're wrong." Systematic risks are still risks even if they don't manifest and if you want to argue Paul Graham is wrong you have to argue why the risks aren't risks. (I don't know what risks he pointed out, so I don't know whether I think he's right or not)
- sicp-enjoyer 4y agoIn your view, in what sense are alternative outcomes are actually statistically probably. It sounds to me like you're saying: when the tweet was made the universe was about to make a dice roll. There was a probability that bitcoin went down and a probability that bitcoin went to the current price, and the universe rolled and happened to land on the current state, but the others could also have happened if luck had gone another way?
- SilasX 4y agoThat goes to the full discussion of an unrelated story. Direct link to the subthread where you made the FB comment: https://news.ycombinator.com/item?id=33573232 https://news.ycombinator.com/item?id=33573232 (Edit: I would have referred to the company as Meta, like you did, but “the Meta comment” could have been confusing, even with the capitalized letter.)
- j-bos 4y ago> Markets aren't efficient. Markets: eventually efficient
- grog454 4y agoEvery consensus is potentially wrong, which makes it an opportunity. > I was repeatedly trying to convince HN readers There's not much point. Invest how you see fit and let others figure things out the hard way.
- georgeecollins 4y agoI listened!!
- fdsjjfds 4y agoYou're not crowing about short-term stock gains, are you? Because that would be a terrible basis for financial advice.