Trip7

"I think there are some real bargains out there"

I agree. Facebook IMO is one of them. Wonderful fundamentals and silly strong growth.

"Fundamentals of the old days are gone"

Completely disagree

I guess when you're holding the bag during an eyewateringly steep descent, you say whatever it takes to make you feel better. As the Nation comes out of the Pandemic many Peletons are going to become expensive clothes hangers. The stock won't hit reasonable valuation until $50 a share or so. Folks think they are "buying the dip" when instead they are trying to catch a falling knife.

Fair Warning for Buy the Dippers:

On March 10, 2000, the Nasdaq Composite Index hit an intraday high of 5132.52. We all know what happened next. By October 2002, the index had fallen 78.4%—to 1108.49.

If the Dow Jones Industrial Average were to follow the same script, it would be trading at around 5400 in October 2022, and not make it back to its current level until November 2034 (or, on an inflation-adjusted basis, the summer of 2037). It is hard to overestimate how devastating such a scenario would be for retirees and soon-to-be-retirees.

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mispoken

This is absolutely absurd. It’s a typical CNBC talking head thing to say. It’s almost as relevant as saying “if my bike had one wheel it would be a unicycle” or “if I’d bought Bitcoin at .00001 I’d be a trillionaire”. I’m tired of the “doom and gloom” crowd saying these things for the last decade because they read a book on “value investing” and cite a small period of time which proves their point. No one zooms out and looks at the performance over long periods of time. For example, ARKK was started in 2014. Even with the last several months, would you have been better off in ARKK or SPY if you invested a dollar in 2014.

How about this, since we are cherry picking random timeframes, if you invested $10k in SPY at the start of your career in 1990, it would be worth $165k today. This includes the time period of the dot com bubble and the Great Recession. Here’s another one; if after the dot com bubble you invested $10k in SPY in 2006 it would be worth $46k. We can do this all day, but I’d completely pointless.

The biggest point to make, is that people just talk. Talk talk talk…..they say words like “valuation” and “rotation” because it sounds smart. No one ever puts their money where their mouth is and backs these things up with data that examines an investment style vs a legitimate benchmark such as SPY or QQQ. Without data it’s all just words.

I will always be happy to revisit this discussion in 5 years when words can be validated with significant data. I have my data, my methodology of investing in “highly overvalued” companies has done very well over 5+ year timeframe, even if I give back ALL of 2020.

I don’t pretend to be smarter than the market; I don’t think I’m an expert at finding value (as If EVERYBODY isn’t looking for that, whatever your definition of it is). In fact, it’s the opposite, I know I’m not smart enough to do these and the metrics one can examine are endless. I resign myself to the fact that today’s best performing companies got there through innovation and CREATED the value. Most of them continue to do so.

So, I’ve said my piece. I knew this thread would revive based on the last few months of market movements, but the reality is that the last 3 months, while painful for some, just doesn’t matter if you’re a long term investor. Long periods are all that matter in investing.

Trip, my challenge stands. Collect your data, compare it to the SPY and bring it back in 5 years. Not saying I’ll be right or perform better, But it sure would be interesting. Let me know if you need help setting up the spreadsheet to track it.

Trip7

I gladly accept your challenge as the odds are significantly stacked against your investing style. Nosebleed valuations and rising interest rates are not kind to Growth especially if you're concentrated in US. Simply investing in an emerging market index might win the challenge.

At the end of the day investing in companies is simply a game for buying future cashflows for as little money as possible. Folks have forgetten about that and switched to buying hype for as much as possible then hoping to sell it to someone else for more.

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mispoken

tell me when the “hype buying” started and I’ll tell you when I started investing long term/buy and hold. Your argument is one I’ve heard for the better part of 2 decades.

Down to the nitty gritty, the way I track performance is using modified internal rate of return (XIRR function in Google sheets/excel). I log all cash in flows, outflows, start and end balance. The actual investments aren’t what matter here, just how much you’ve put in, taken out and your starting balance vs the ending balance. Although, for transparency I’d be happy to list my holdings in this friendly wager.

Let me know when you want to start the clock.

Trip7

Let's start the clock Dec 19th. I track all my investments thru Sharesight.com so I'll be able to have full investment reports

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mispoken

To clarify; December 19 2021-December 19, 2026?

Trip7

Dec 2020 to Dec 2025

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tcco94

lol @ you thinking they are going to be used as cloth hangers. It's like I just read an article from seeking alpha from a guy who hasn't exercised in 2 decades. Therefore stock must be junk.

Talking about the dow at 5000. This is literally what I mean about people trying to use old fundamentals on the market. With the way money flows through the market today vs 30 years ago it has now changed forever. Can't wait to see your head explode the day the Dow hits 50k.

mispoken

Parsing out my purchases and cash flows in reverse is somewhat cumbersome. Let’s pick a future data and start there. I may even look into the site you use so we can have the same metrics. All I track is annualized rates of return vs the S&P, does it offer that?

Trip7

No problem. June 2021-June 2026

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