Quote:
|
Originally Posted by SportingBD
You can’t value companies with fundamentals anymore.
I would be very curious if someone can show me how they worked out the intrinsic value for any of the tech stock. I can’t make sense of the valuation.
|
I'm not going to get into the details of a DCF or LBO model that is generally leveraged, pun intended
, to evaluate a company by investment banks. However you're being a bit dogmatic and overlooking something basic that may prevent you from taking advantage of unique opportunities. Post March 2020 we've been living in a world where unlimited money is being printed by central banks around the world. Long term treasury bond yield in Europe is pretty much negative and the US is also headed in that direction. So in order to eradicate risk you're essentially paying the bond issuer money to hold onto your cash instead of getting paid anything. In a world where cash is quickly becoming trash, isn't it better to get 2.75% than 0 or negative return? Another example, AMZN is printing money by selling products that have value. On the other hand cash is being printed at will without being pegged to anything of value. That's why many of the financial principles can't be applied to today's market until those factors are addressed one way or another. That said, although I'm still putting in new money to work, I'm getting slightly more cautious and starting to hedge a few risky positions as S&P approaches 360-380 levels.