Not Investment Advice

[Devilmaycare]

CRM has always been on my radar since I use it at work and they own LinkedIn, but I haven't been able to get past their P/E ratio and lower than projected growth rates. I just know it will be a waste of time to run the DCF on them. It's probably better to look at P/S with a company like CRM, but the market is not especially kind to companies selling based on sales multiples of late.

Pharmaceuticals are tough. You can't just look at revenue and cash flows. You actually have to read some analysis or their 10K to get an idea of what drugs they have in the pipe as well as their current drugs that are coming off patent. That industry is not a core competency of mine so I have stayed away.

I think JNJ would be a smart play in theory provided valuation is good because of their pharmaceuticals business is paired with a solid consumer staples business to provide stability but even JNJ is spinning off their pharma business.

One slight correction in case anyone uses it in as part of an investment calculation. Linkedin is owned by Microsoft, not Salesforce. They bought them back in 2016.

 

[Folster]

One slight correction in case anyone uses it in as part of an investment calculation. Linkedin is owned my Microsoft, not Salesforce. They bought them back in 2016.

Jesus. I've had that "fact" in my mind for years. Thanks.

 

[elindholm]

I think JNJ would be a smart play in theory provided valuation is good because of their pharmaceuticals business is paired with a solid consumer staples business to provide stability but even JNJ is spinning off their pharma business.

JNJ looks overbought to me and that kind of staple (KMB, UL, PG) just hasn't been doing well at all these days. I'm more into the food/drink staples like K and KO, both of which are up YTD.

 

[Folster]

JNJ looks overbought to me and that kind of staple (KMB, UL, PG) just hasn't been doing well at all these days. I'm more into the food/drink staples like K and KO, both of which are up YTD.

I want PEP so bad, but it just keeps climbing.

 

[Folster]

Are mortgage lenders a value play? Rising rates have crushed the refi business. The largest home lender Rocket Mortgage (RKT) is down nearly 60% from its all time high. The general thought is that rates will keep going up, but a recession could easily force rates back down and you can't ignore the fact that our government needs rates to be low in order to keep deficit spending and to be able refinance our existing debt at manageable rates. I haven't looked at the numbers for any lenders, but it could be an opportunity down the road.

 

[dscher]

Are mortgage lenders a value play? Rising rates have crushed the refi business. The largest home lender Rocket Mortgage (RKT) is down nearly 60% from its all time high. The general thought is that rates will keep going up, but a recession could easily force rates back down and you can't ignore the fact that our government needs rates to be low in order to keep deficit spending and to be able refinance our existing debt at manageable rates. I haven't looked at the numbers for any lenders, but it could be an opportunity down the road.

At some point, the big pivot in the mortgage industry will have to be reverse mortgages. IMO. If demand dries up for any amount of significant time, it will force the issue for many who still have a decent amount of equity from long term ownership. Mostly the elderly. Of course, in any event of a prolonged crisis or downturn.

 

[BigRedRage]

The big pivot will be new home purchases and equity loans. Refinances are cyclical.

 

[dscher]

The big pivot will be new home purchases and equity loans. Refinances are cyclical.

In event of significant economic downturn?

 

[Folster]

The big pivot will be new home purchases and equity loans. Refinances are cyclical.

HELOCS, I agree assuming home prices don't fall significantly. I'm not sure we have supply for new home purchases to drive origination.

 

[BigRedRage]

In event of significant economic downturn?

Well, sure, I guess I do not keep my "what if the bottoms falls out of everything" glasses on very often.

The current reasoning for the massive drop in the mortgage industry is because the REFI boom is over and the current pivot is to equity loans and new home purchases is all I was getting at.

 

[elindholm]

Are mortgage lenders a value play? Rising rates have crushed the refi business. The largest home lender Rocket Mortgage (RKT) is down nearly 60% from its all time high. The general thought is that rates will keep going up, but a recession could easily force rates back down and you can't ignore the fact that our government needs rates to be low in order to keep deficit spending and to be able refinance our existing debt at manageable rates. I haven't looked at the numbers for any lenders, but it could be an opportunity down the road.

In this little region of the financial map, I prefer Business Development Companies, because they have to return most of their profits as dividends in order to enjoy certain tax advantages. ARCC has done well for me, +9.6% over the past year and a 7.7% trailing dividend on top of that.

 

[dscher]

xc_hide_links_from_guests_guests_error_hide_media

 

[Devilmaycare]

Are mortgage lenders a value play? Rising rates have crushed the refi business. The largest home lender Rocket Mortgage (RKT) is down nearly 60% from its all time high. The general thought is that rates will keep going up, but a recession could easily force rates back down and you can't ignore the fact that our government needs rates to be low in order to keep deficit spending and to be able refinance our existing debt at manageable rates. I haven't looked at the numbers for any lenders, but it could be an opportunity down the road.

Personally I'm weary of anything in that sector and won't direct buy it. I'm going to be shocked if we don't hit a recession in the next year and when that happens I think the housing bubble is going to explode. If I'm right it's not going to be pretty but we'll have a good buying opportunity then.

 

[Folster]

Personally I'm weary of anything in that sector and won't direct buy it. I'm going to be shocked if we don't hit a recession in the next year and when that happens I think the housing bubble is going to explode. If I'm right it's not going to be pretty but we'll have a good buying opportunity then.

It's hard to invest in segments that are unloved, but that's part of value investing. I tend to think it's too early as well, but it's something I will watch and take a closer look.

 

[elindholm]

I'm spread thin over 17 mutual funds, and the only one that's measurably up over the past 60 days is RRRAX, which does REITs. So I'm inclined to view that sector somewhat generously. RKT is considered a financial rather than a real estate stock, but it's in one of those gray areas. If I hadn't already taken a huge hit on OPEN, I'd give RKT a careful look.

 

[BigRedRage]

Robinhood now allows trading prior to the market open and for two hours after the market closes. My window for poor decision making just grew by 50%.

 

[Folster]

Robinhood now allows trading prior to the market open and for two hours after the market closes. My window for poor decision making just grew by 50%.

Do they allow market orders or do they force limit orders?

 

[BigRedRage]

Do they allow market orders or do they force limit orders?

I placed a market order for 24% down NFLX shares

The Future of Investing is 24/7 — Under the Hood

We’re working towards 24/7 investing, starting with new extended hours from 7 a.m. to 8 p.m. ET

blog.robinhood.com

 

[BigRedRage]

I placed a market order for 24% down NFLX shares

The Future of Investing is 24/7 — Under the Hood

We’re working towards 24/7 investing, starting with new extended hours from 7 a.m. to 8 p.m. ET

blog.robinhood.com

like I said, more hours for bad decisions lol

 

[Folster]

I know we have some TSLA believers in here who have made a lot of money investing in TSLA. I thought it would be fun to run my analysis. Assuming a blistering 40% annual growth rate over the next 5 years, I calculated a target price of $200. I'd likely never assume such a high growth rate as that would give TSLA $300B in revenue in 2026. For comparison, AAPL had $365B in revenue in 2021. GOOG had $257B, MSFT had $168B, and AMZN had $470B.

I'd never short TSLA or Musk, but it's only a matter of time before we see a FB/NFLX-like re-pricing or worse for TSLA. It's so overvalued that it couldn't possibly grow into its extreme valuation even if you used the most optimistic projections.

 

[BigRedRage]

I know we have some TSLA believers in here who have made a lot of money investing in TSLA. I thought it would be fun to run my analysis. Assuming a blistering 40% annual growth rate over the next 5 years, I calculated a target price of $200. I'd likely never assume such a high growth rate as that would give TSLA $300B in revenue in 2026. For comparison, AAPL had $365B in revenue in 2021. GOOG had $257B, MSFT had $168B, and AMZN had $470B.

I'd never short TSLA or Musk, but it's only a matter of time before we see a FB/NFLX-like re-pricing or worse for TSLA. It's so overvalued that it couldn't possibly grow into its extreme valuation even if you used the most optimistic projections.

check out @garyblack00 on twitter

 

[BigRedRage]

First megapack factory is complete, projection is something like 40b revenue annually on top of cars, solar and upcoming AI projects. Semi, cybertruck and roadster in the future to pile on. two new giga factories went online last month, production increases q over q. By 2024 production should be more than doubled with the new factories at full steam. Probably less time than that.

 

[Folster]

First megapack factory is complete, projection is something like 40b revenue annually on top of cars, solar and upcoming AI projects. Semi, cybertruck and roadster in the future to pile on. two new giga factories went online last month, production increases q over q. By 2024 production should be more than doubled with the new factories at full steam. Probably less time than that.

All of that stuff is great, but that doesn't justify any price.

I projected revenue of $300B in 5 years (2026) in my analysis

Here are revenue projections from Finbox. They aren't projecting $300B until 2031.

You must be registered for see images attach

Even if I juice cash flow as a percentage of revenue to 10% and lower my expected return to 7.5%, I still only get a share price of $480.

To be fair, my model also shows AAPL, AMZN, and GOOG as significantly overvalued as well, and I hold those stocks, but they are nowhere near the overvaluation of TSLA currently is according to my model.

 

[Folster]

I calculated a fair value of MSFT at $250-260, but for a margin of safety and my required rate of return of 10%, my target price is $175 so I won't be buying any time soon. GOOG is much closer to my target price.

 

[BigRedRage]

struggling with myself to not buy the tsla dip. so tempting. already overweight. if it somehow miraculously gets to 700....I'm going all in.