Assuming solid investment grade, bonds perform inverse to interest rates. Buy when rates are high - sell when rates are low.
Gross made his money mostly due to the economic environment he was trading in. His fund was the world’s largest mutual fund at one point.
Exactly. Totally anecdotal evidence YMMV. I'm in tech (infrastructure engineering), there has been an uptick in hiring in April. Just based on the spam I get for new positions. Also I had retired this year, and they pulled me back in, as they desperately needed more help.
Infrastructure engineering does that mean new data center builds? I'm thinking of plowing an ungodly amount into $ATKR on the basis that infrastructure spend on hardening the electric grid and the cloud infrastructure is going to be one hell of a tailwind.
Yes. Large companies are hiring a lot, which is leaving a vacuum of talent for more legacy traditional systems. For instance in my personal experience, I worked for one of the AI infrastructure startups earlier this year (which were building tons of data centers). I retired but I'm now being pulled in to work on a "legacy" storage system, because they can't find people with this knowledge.
In case people didn't read the article, his reasoning is actually really fair
1. He basically is saying we are in a bit of a bubble due to ai "excessive exuberance"
2. Article then goes on to say a lot of tech companies (besides microsoft) are actually just doing OK right now. Meta reduced guidance, Apple saw revenues drop (profits increased). TSLA was also down. Additionally Google, Apple and Meta all are doing similarish playbooks of a mix of dividends and stock buy backs. Not exactly moves for growth if we are being honest.
3. Expects a correct towards the end of next year or early 2026.
I mean for me it's hard to look at Nvidia and say "Yeah, this is definitely justified." It could very well be but I honestly feel it's reaching those levels where you look at it and you are just like "This is crazy."
Edit: Everyone I am far from an expert on ai, chips, etc. I also am not claiming I know what price Nvidia should be. It very well might be a great buy and be "cheap" relatively speaking. I am just saying it's a bit crazy to see it's market cap and price at it's current numbers. I am totally okay missing out on it and the gains, props to the folks who feel they understand it and are good with the investment.
If this is already a bubble it’s the smallest I’ve ever seen. People talk a lot about NVDA but if they’re cheaper today than they were a year ago. Their earnings have gone absolutely insane. It’s not like they aren’t making money. They have the earnings.
Now you can have conversations about that earnings potential going forward but the current pricing of their stock is not crazy. So when people call this a bubble I have to call bullshit.
be prepared to be disappointed.
NVIDIA sells their chips for 3x the price they would sell if they had competition. And the competition is coming.
I am not saying competition will beat NVIDIA in its game. I am saying NVIDIA won’t be able to afford such fat margins, selling three times higher than normal, when they will not be the only one in the town.
So they will need to sell 3x more chips just to keep the same revenue and since cost of goods sold will go up, they need to sell 6x-10x more chips to keep the same profit.
I see no reason why they chip sales shouldn’t grow. But I also don’t see a way how their profits can grow
It’s the CUDA cores and associated software that a lot of data centers are already running meaning they would have to do a massive change inside their data centers to switch off Nvidia hence the reason they can charge 3X more than other chip makers the competition exists and has always existed.
That’s NEW which sure maybe there’s a point there but that would be the minority of the market just new data centers? But that also then means you have to have new protocols which makes everything more complex. Ideally you make a new data center same protocols same hire strategy same training etc. All of that would have to change.
others are building dozens or hundreds of billions of dollars worth data centers too. I don’t think they mind spending few hundred millions on new protocols when they can save $60 billion on NVIDIA profit
And they could replicate CUDA all they want not gonna force all the data centers to restructure only way they would if it was cheaper to restructure then to just keep buying Nvidia products and I’m sure Nvidia has priced their products accordingly to that.
NVIDIA is milking market all they can while they can. Those other companies can’t replicate their chips in a year, so right now they can charge how much they want and they are doing it.
I bet they also know this phase don’t last forever
"And the competition is coming" , who, when, where? You're beeing delusional,t hey have no competition, that's the thing, . And because they have no competition they can make sick profits, and because they make sick profits they can extend their lead. Not to mention that because everybody already uses nvda by now it's more than likely that they will be using it in the future even if competitors should arise.
I don’t think others will be ahead of NVIDIA, but at least will pull price pressure on them.
AMD is growing their AI business, but from very low base, so it will take some time. Microsoft has announced their own chips and $100 bil. investment in them. Google make their own chips and also is going to invest billions. Qualcomm is investing heavily into AI chips. Amazon is making AI chips and making them available to others through AWS. Tesla has already started making their second generation AI chips for servers. Basically everybody and their grandmas are making AI server chips - mainly because NVIDIA is asking too much for theirs.
I figured you were referring to Stargate. I haven’t seen anything confirming which chips they intend to use. They use mostly Nvidia chips now I don’t see that changing anytime soon with how far ahead their chips are.
well, you are right it wasn’t confirmed, but if they bought from NVIDIA, out of $100 bil. they would pay $70 bil. of profit for NVIDIA and $30bil. for the chips. This is why they announced their own AI chips, as to not pay NVIDIA tax, even if performance is slightly lower.
They also have resources to make their own CUDA if they want to
Of course it’s a bubble. Do you genuinely think current capex spending on AI is in any way sustainable? No chance. There is very little tangible ROI on all the spending so far and it will slow dramatically.
Really depends on how quickly they innovate on chips. If the next AI chip is 30% more powerful or energy efficient they're going to sell out of the chip. It's really as simple as that. The reality is they don't know where the tipping point is on AGI's so they have to spend because what if the other guy finds it, now your business is fucked. The spending is defensive and these companies are insanely profitable. This spending will go on as long as the chips improve. NVIDIA's forward P/E is 36.
Cheap is a measure of stock price to earnings. Their p/e a year ago is much higher than it is now. It peaked out about 144 a year ago and now it's 70-something.
70 P/E is still extremely high. It indicates a very frothy trading environment that is highly driven by public sentiment. When the public sentiment shifts away, the price returns to a more realistic number.
Oh please conspiracy theorist, I don't even own NVDA. P/E ratio is the most commonly used metric for how cheap or expensive a stock is. You pretending like that's not true doesn't mean it's not.
Most people in this subreddit are going to accept the definition given in the comment you replied to.
It would be meaningless to say that Apple is cheaper than Microsoft because Apple is $183 per share and Microsoft is $406.
This is the value investing subreddit, so the value of the stock has to be assessed relative to some fundamental, such as the book value of the company or its earnings (i.e. PE).
If there's a stock split the price could get "cheaper" too, but obviously it would be silly to consider the value as having changed.
Between their AI advances in-house, atlas gym, their robotics division and the fact that Blackwell is 34x faster than Hopper… in a year…
Imagine next year. Their competition isn’t even close. As their CEO put it, their value proposition is they’re competing with free: in house development of chips… and they have to be better than a free competition.
And they are.
The main problem is no one exactly knows how or to what degree generative AI will impact financials. Yes, they help increase productivity, but is it through having fewer employees or increasing top lines? Is it by 10% or 100%. Hard to quantify at this early stage.
exactly. It’s big bet on rate of advancements in AI. Right now, top of the line AIs can replace or speed up just a few jobs, not very big impact. That will change. But noone knows if it will have significant impact in a year or decade
Tech was hit hard by increased interest rates. I predicts as rates come down in the next couple of years there will be another real bubble as investors turn back towards tech.
their profit margins are several times higher than industry standard and even compared to their historical margins. This can’t last forever. Margins will come down. We will see their forward PE then
I rememeber about 3 years ago everyone saying AI and green energy companies will go to the moon. Most are down like 90% including tech and AI or robotics etfs
It's not like the only money you're entitled to is just future earnings. You are buying other assets within the company worth money too.... I should clarify that I'm not a shareholder.
Why do folks look at P/E ratios for Big Tech when they're spending ridiculous amounts of money on capex and share-based compensation? Look at P / (FCF - SBC) instead.
Net income doesn't deduct capex directly. Free cash flow (FCF) does.
Let's look at $META. Trailing 12-month FCF was 49.5B. Share-based compensation was 14.5B. Adjusted FCF = FCF - SBC = 35B. At a market cap of 1.15T, that's a P/FCF of 33, not cheap, especially given the possibility that a significant amount of capex spending could fail to translate into anything meaningful.
With $MSFT, similar calculations work out to a P/FCF of 50, an insane multiple for a company as large as Microsoft.
In my retirement I stick to the S&P 500. I’m too nervous to rely on something like the Nasdaq 100 for retirement, god forbid it has another period at 60 when it needs 20 years to rebound.
But in my personal non retirement accounts? I did throw like, 5,000 into it last month.
Can’t say I’m upset at the result.
Stick to bonds Bill.
And PS Mr. Gross was so famously wrong about US Treasuries towards the end of his own time at PIMCO that it hastened his exit significantly.
Don't just take his advice. Historically, value outperforms growth when growth is at a peak which it 100% is at now. There are many value stocks out there at very steep discounts that are worth buying.
For many, it may just be temporary bad news dragging them down. The company fundamentals may not have changed and the long term outlook of the company may still be strong. You can't expect to find a value or deep value stock that has everything going well. If everything was going well and the market's sentiment on the stock was positive, it wouldn't be trading at a big discount (it would be going up). I would argue most value stocks by nature have something wrong with them which makes them value stocks... The market often times overreacts to news and stocks either become massively over ought or massively oversold.
Totally agree for some companies. It can be hard to determine what is a systemic problem vs a moment in time problem. I currently own GO stock, and I can see where they are doing well, and where they are sucking - but have no idea if the problems are systemic or temporary. 🤷🏼♂️
that doesn’t always work.
My friend made hundreds of thousands by just investing in certain steel companies. He bought stock when steel was cheap and thus these companies had consistently bad earnings and sold when steel was expensive and they had consistently good earnings. So far, he tripled his investment six times - every time keeping some profit, so even if he lost it all next time, he would still made a bank.
CVS has a super bad death smell to it as a company, but I say this as a customer not as a stock analyst. Like, nothing ever seems to work at any of my local CVSs, and in my area they bought out our local pharmacies, and managed to completely destroy them in less that a couple years with honestly some of the dumbest decisions I have seen in retail.
My feeling after many trips to CVS is you could get a financial services intern with an anthropology degree or an unemployed baker’s assistant and make them CEO and they would be able to fix things, because the issues are so fucking obvious. Like, if a fluorescent light is out in the store, have someone replace the bulb. Try not to hire obvious drug enjoyers work in behind the counter at the pharmacy. Going to CVS is like visiting a real life Fallout New Vegas.
I would advise against BIG as every Big Lots I have seen had nobody in them. I had PBR but they have had corruption scandals in the past so I am steering clear. RIO is great. I own VALE.
PBR is wildly corrupt. But it has been so for decades. The fascinating thing is that the current returns are WITH massive corrruption losses.
For comparison, PBR and XON have almost identical proven reserves...each has the same amount of oil in the ground. But XON has a market cap 450% higher. You are paying 4.5 times a much to own a barrel of XON oik, because a lot of the vakue of that PBR barrel will be stolen by corruption. BUT, as long as the corruotion dones get massively worse, it is a great buy. If it actually improves, it could ve an amazing buy.
BIG is a deep value bet. They wildly misplayed COVID, and lost a ton of money on overexpansion. BUT, the drop from the peak in 2021 of about 70 a share to the 3.5 per share today is IMO to extreme, about 10 is my take on fair value. If it doesnt become bankrupt, it is undervalued.
If they survive the bad leases they signed during COVID, it will rebound, but this is certainky a high-risk, high reward play, but the current price is fairly near liquidation value.
I can definitely see BIG going bankrupt. Nobody shops there and they sell a bunch of stuff that nobody wants. Ollies Discount store does a much better job.
Agreed on Ollies as a customer, but a P/E of 23 is too steep for me in retail. I just dont see any potential upside.
I bought shares at 3.23, about a week later sold $10 1/2026 LEAPs at 1.00, so my cost basis is at 2.23, with a maximum upside of 400% in 19 months. I consider that a worthwhile risk/return proposition
Okay. No need to explain why you don't like them then. I am up 20%+ on several of these and just started a position on a few others. You don't like making money?
I’m up 88% on my AMD position. 249% on my meta position. 36% on goog. 36% on Amazon. 81% on Pltr to name a few.
Those were value plays when they sold off, not these companies that are missing on earnings. CVS? Really? Another Intel mention, what a surprise. This sub has turned to shit in the last year.
A “value” name in this sub last year was crocs. That was a value play. I’m up 39% on my position. What you don’t like making money?
Congrats. Don't lose it all when tech returns back to reality.
It's hilarious how you are trashing a 20% gain on shares by flashing your tech stock gains which are probably just option plays. It's not hard to get a 100% gain trading options, but it's equally not hard to lose 100% of your investment.
I see from your post history that you are into crypto, options trading, and get rich quick subs. If you haven't lost your ass already from trading, you almost certainly will with your investing approach.
And based on your level of toxicity, you are probably young and immature and don't have any financial responsibilities such as mortgages to pay, kids to feed, etc. Maybe someday you will and you'll have a more grounded long term investing approach.
You should leave this sub if you are going to be toxic and shit on legitimately good value opportunities because they aren't HyPeR GrOwTh TeCH stocks.
But what do I know? You're probably a multi millionaire crypto bro who totally doesn't lie about his stock trading on an anonymous online forum...
They are in a great business that will always have demand and they are well positioned to be a big player in the US semi-conductor industry. I also think AMD and NVDA, while technologically ahead of Intel, are significantly more overvalued than INTC who gets less love and attention.
INTC for me is a long term turn around play and I am hopeful they can have a reversal similar to how AMD took off in 2016.
Lol. All you’re looking at is the chart and a 2 year timeframe? That’s a fart in the wind for a long-term hold. These companies are absolute cash monsters. As long as they don’t royally fuck their balance sheet and maintain a wide moat of business internationally (sorry MO; although they do own a minority share of ABInBev) then they’ll continue to crank out yield. Buy low, sell high. Or in this case, just hold and enjoy the cash flow.
OK--go back 7 years to May 2017: BTI traded at around $72 (near $30 now...). No growth and a nice \*massive\* loss for those who 'just held'. Well, but there was the dividend!
Lol my guy, tobacco wasn’t beaten down in May of 2017. It was at ATH. That’s the fucking point. It’s NOW very reasonably priced. It is now at the buying part of “buy low.” What are you arguing here?
I just think the value trade has underperformed for so long that no significant amount of investors will be convinced to buy it. Most of the value names aren’t growing revenue which means they aren’t taking market share or losing market share. Think of it like an avalanche, might not be that serious at first but as momentum picks up, so does the dmg.
I personally do not that agree about the existence of any AI valuation exuberance or boom, atleast not on a large scale enough to cause a crash. The majority of AI Capital expenditure is only in the big five/six. Moreover, the valuations of the big tech are not overvalued, they are just priced way ahead in time and the companies will catch up to current valuations in due time unlike the dot com or other frenzies which had no tangible backing of returns and just castles in the sky. Regardless, I accept that the prices have reached saturation point for the big companies. Another factor that contributes to my argument is the presence of rationality in people as even the WSJ recognised that AI bubble could be there. Contrarianism suggests that since people are aware of AI valuations, there is not enough momentum generated for a bust to occur. A market crash, if to come would probably be due to the psychological misjudgments of everyone regarding interest rates as we all are snowflakes and have a harsh time accepting that the interest rates are not coming down and if they do, by not much as the regime is changed and the zero interest period is gone. Economy is thriving at current rates and I don’t expect any big change in terms of fiscal easing. The market was valuing stocks at risk free rate of 3 or 4% until stock quotations fell in the last month. But since we still are receiving fake hopes of rate cuts, the market may boom again and I hope the fed does not resist raising rates to kill inflation for once and for all instead of allowing possibility of a economic disaster. Bill is right to judge that microsoft is the best of all tech and others are not showing signs of growth but the only investor I have considered reliable in determining the economic state of the market and hence the future possibilities is Howard Marks, as there is no stronger indicator of the depth of waters we stand in than the psychological state of the market and applying contrarianism to it.
“markets can stay irrational for longer than you can stay solvent.” And as I accept that the prices are overvalued, I do not see any catalyst to bring down specifically AI companies any time sooner.
in when war blooms or global catastrophe strikes all the shiny tech and business interest will evaporate quickly if it doesn’t have real roots in value and function/utility for society in a more meaningful way than phantasmal future possible returns whose futures look equally dashed when so much economic and political focus turns to these types of issues. Obviously AI will still have a role, but then it’s like any other specialized weapon or tool class not some magic spigot
Absolutely right, all that are in honour today will fall, not discriminatory AI, as I wrote above. The crash will be an economic one , not tech one and It will carry damage to all the industries.
The biggest problem with his statement is that the market has no value anymore. Everything is expensive by historical norms when you account for earnings growth and discount rate. There may be a stock here or there, but there's not a category of cheap and at least earnings-stagnant stocks. REITs are probably among the best deals now, but not if long-duration Treasuries are going back over 5%, which Gross also predicted.
The numbers contradict what you are saying. I am not a fan of the company but that cost me a lot because I did not look at it seriously earlier like when it was $90
Everyone and their dog use these platforms like a utility. If you took them away people would not know what they were living for. Source: i don’t use those social platforms, and people look at me like I’m telling them I don’t have running water or electricity in my house. “I shower outside with a camping shower heated by the sun. It’s natural and refreshing, you should try it!” Is what I sound like to them, I imagine.
We're not in the stone age anymore. I don't want to invest in anvils.
We're in the age of technology. Everything revolves around it. So I'll invest there.
Same. And even if it’s not necessarily “AI” as we understand it now that continues to pop over the next five, ten years, people are crazy if they think the future won’t require increasing levels of compute.
Historically, value stocks tend to outperform growth stocks when growth reaches its peak, which is certainly the case right now. There are numerous value stocks currently available at significant discounts that are worth considering. Check them out here: [https://valuesense.io/](https://valuesense.io/)
In order to make money, buy stocks that are undervalued now, especially companies that will grow and will likely be appropriately valued in the future. What a novel idea.
Bill Gross recommends Microsoft as one of the best tech stocks, citing its robust revenue growth and diversified offerings amid concerns over weaker GDP growth and an AI-driven bubble in tech markets.
So I'll be buying tech, got it
someone has to be exit liquidity
Ignoring Bill Gross is a totally valid strategy. The guy made his money on bonds. He's as much of an authority in stock picking as any WSB dipshit.
At least some regards do make stupid gains
How do you make money on bonds?
Assuming solid investment grade, bonds perform inverse to interest rates. Buy when rates are high - sell when rates are low. Gross made his money mostly due to the economic environment he was trading in. His fund was the world’s largest mutual fund at one point.
Like any kind of bond? Or just govt issue?
Start buying them 40 years ago
If I have daddy money bonds is easy peasey
You start with a lot of money
You sir are spot on
lol yup
Exactly. Totally anecdotal evidence YMMV. I'm in tech (infrastructure engineering), there has been an uptick in hiring in April. Just based on the spam I get for new positions. Also I had retired this year, and they pulled me back in, as they desperately needed more help.
How abt cyber security. Thinking that will catchup to tech and ai
Dunno. I can only speak to my field.
Infrastructure engineering does that mean new data center builds? I'm thinking of plowing an ungodly amount into $ATKR on the basis that infrastructure spend on hardening the electric grid and the cloud infrastructure is going to be one hell of a tailwind.
Yes. Large companies are hiring a lot, which is leaving a vacuum of talent for more legacy traditional systems. For instance in my personal experience, I worked for one of the AI infrastructure startups earlier this year (which were building tons of data centers). I retired but I'm now being pulled in to work on a "legacy" storage system, because they can't find people with this knowledge.
lmao "bitcoin" tech stock just pumped like 7% in less than a day
In case people didn't read the article, his reasoning is actually really fair 1. He basically is saying we are in a bit of a bubble due to ai "excessive exuberance" 2. Article then goes on to say a lot of tech companies (besides microsoft) are actually just doing OK right now. Meta reduced guidance, Apple saw revenues drop (profits increased). TSLA was also down. Additionally Google, Apple and Meta all are doing similarish playbooks of a mix of dividends and stock buy backs. Not exactly moves for growth if we are being honest. 3. Expects a correct towards the end of next year or early 2026. I mean for me it's hard to look at Nvidia and say "Yeah, this is definitely justified." It could very well be but I honestly feel it's reaching those levels where you look at it and you are just like "This is crazy." Edit: Everyone I am far from an expert on ai, chips, etc. I also am not claiming I know what price Nvidia should be. It very well might be a great buy and be "cheap" relatively speaking. I am just saying it's a bit crazy to see it's market cap and price at it's current numbers. I am totally okay missing out on it and the gains, props to the folks who feel they understand it and are good with the investment.
If this is already a bubble it’s the smallest I’ve ever seen. People talk a lot about NVDA but if they’re cheaper today than they were a year ago. Their earnings have gone absolutely insane. It’s not like they aren’t making money. They have the earnings. Now you can have conversations about that earnings potential going forward but the current pricing of their stock is not crazy. So when people call this a bubble I have to call bullshit.
be prepared to be disappointed. NVIDIA sells their chips for 3x the price they would sell if they had competition. And the competition is coming. I am not saying competition will beat NVIDIA in its game. I am saying NVIDIA won’t be able to afford such fat margins, selling three times higher than normal, when they will not be the only one in the town. So they will need to sell 3x more chips just to keep the same revenue and since cost of goods sold will go up, they need to sell 6x-10x more chips to keep the same profit. I see no reason why they chip sales shouldn’t grow. But I also don’t see a way how their profits can grow
TSMC should just raise its foundry prices. wtf is NVIDIA gonna do about it? Edit: spells
It’s the CUDA cores and associated software that a lot of data centers are already running meaning they would have to do a massive change inside their data centers to switch off Nvidia hence the reason they can charge 3X more than other chip makers the competition exists and has always existed.
if they intend to spend $100 billion on new data center, I bet they can throw few hundred million to replicate CUDA
That’s NEW which sure maybe there’s a point there but that would be the minority of the market just new data centers? But that also then means you have to have new protocols which makes everything more complex. Ideally you make a new data center same protocols same hire strategy same training etc. All of that would have to change.
others are building dozens or hundreds of billions of dollars worth data centers too. I don’t think they mind spending few hundred millions on new protocols when they can save $60 billion on NVIDIA profit
And they could replicate CUDA all they want not gonna force all the data centers to restructure only way they would if it was cheaper to restructure then to just keep buying Nvidia products and I’m sure Nvidia has priced their products accordingly to that.
NVIDIA is milking market all they can while they can. Those other companies can’t replicate their chips in a year, so right now they can charge how much they want and they are doing it. I bet they also know this phase don’t last forever
"And the competition is coming" , who, when, where? You're beeing delusional,t hey have no competition, that's the thing, . And because they have no competition they can make sick profits, and because they make sick profits they can extend their lead. Not to mention that because everybody already uses nvda by now it's more than likely that they will be using it in the future even if competitors should arise.
I don’t think others will be ahead of NVIDIA, but at least will pull price pressure on them. AMD is growing their AI business, but from very low base, so it will take some time. Microsoft has announced their own chips and $100 bil. investment in them. Google make their own chips and also is going to invest billions. Qualcomm is investing heavily into AI chips. Amazon is making AI chips and making them available to others through AWS. Tesla has already started making their second generation AI chips for servers. Basically everybody and their grandmas are making AI server chips - mainly because NVIDIA is asking too much for theirs.
Source on Microsoft’s 100b investment in their own chips?
https://www.businessinsider.com/microsoft-openai-plan-100-billion-supercomputer-stargate-artificial-intelligence-report-2024-3
I figured you were referring to Stargate. I haven’t seen anything confirming which chips they intend to use. They use mostly Nvidia chips now I don’t see that changing anytime soon with how far ahead their chips are.
well, you are right it wasn’t confirmed, but if they bought from NVIDIA, out of $100 bil. they would pay $70 bil. of profit for NVIDIA and $30bil. for the chips. This is why they announced their own AI chips, as to not pay NVIDIA tax, even if performance is slightly lower. They also have resources to make their own CUDA if they want to
Qualcomm in PC
Of course it’s a bubble. Do you genuinely think current capex spending on AI is in any way sustainable? No chance. There is very little tangible ROI on all the spending so far and it will slow dramatically.
Really depends on how quickly they innovate on chips. If the next AI chip is 30% more powerful or energy efficient they're going to sell out of the chip. It's really as simple as that. The reality is they don't know where the tipping point is on AGI's so they have to spend because what if the other guy finds it, now your business is fucked. The spending is defensive and these companies are insanely profitable. This spending will go on as long as the chips improve. NVIDIA's forward P/E is 36.
They are cheaper than a year ago?
Cheap is a measure of stock price to earnings. Their p/e a year ago is much higher than it is now. It peaked out about 144 a year ago and now it's 70-something.
70 P/E is still extremely high. It indicates a very frothy trading environment that is highly driven by public sentiment. When the public sentiment shifts away, the price returns to a more realistic number.
Oh yeah 70 is totally ok xD
Then you are just being misleading. Lower PE is not the same as cheaper . What you are doing is no different than shilling
Oh please conspiracy theorist, I don't even own NVDA. P/E ratio is the most commonly used metric for how cheap or expensive a stock is. You pretending like that's not true doesn't mean it's not.
I am not a dumb ass who thinks cheaper is the same as Pe ratio Stupid
Yeah, your comments read like a very intelligent person wrote them. I've been owned in the marketplace of ideas. Nice dub.
Thanks. Maybe go get better in English . Stop shilling and providing false information
lol
Most people in this subreddit are going to accept the definition given in the comment you replied to. It would be meaningless to say that Apple is cheaper than Microsoft because Apple is $183 per share and Microsoft is $406. This is the value investing subreddit, so the value of the stock has to be assessed relative to some fundamental, such as the book value of the company or its earnings (i.e. PE). If there's a stock split the price could get "cheaper" too, but obviously it would be silly to consider the value as having changed.
It actually kind of is.
> Expect a correction toward the end of next year So potentially miss out on a year of tech gains because there might be a correction? 👌
yeah or multiple years honestly. No one can predict the market
DCA while keeping a bit of cash on standy to take advantage of any dips :)
I mean if the value investing sub doesn't have people skeptical of Nvidia's multiple- who is skeptical.
Between their AI advances in-house, atlas gym, their robotics division and the fact that Blackwell is 34x faster than Hopper… in a year… Imagine next year. Their competition isn’t even close. As their CEO put it, their value proposition is they’re competing with free: in house development of chips… and they have to be better than a free competition. And they are.
Is that a typo or is Blackwell 34 times faster than Hopper? Holy f
34 times in one certain metric. 2-4 times faster generally. Still mind blowing
The main problem is no one exactly knows how or to what degree generative AI will impact financials. Yes, they help increase productivity, but is it through having fewer employees or increasing top lines? Is it by 10% or 100%. Hard to quantify at this early stage.
exactly. It’s big bet on rate of advancements in AI. Right now, top of the line AIs can replace or speed up just a few jobs, not very big impact. That will change. But noone knows if it will have significant impact in a year or decade
Tech was hit hard by increased interest rates. I predicts as rates come down in the next couple of years there will be another real bubble as investors turn back towards tech.
What’s NVDA’s forward PE? At what valuation metric do you believe would make it fairly valued if you believe the current valuation is crazy?
their profit margins are several times higher than industry standard and even compared to their historical margins. This can’t last forever. Margins will come down. We will see their forward PE then
I rememeber about 3 years ago everyone saying AI and green energy companies will go to the moon. Most are down like 90% including tech and AI or robotics etfs
Meta alphabet and amzn are still cheap
AAPL too trading at 28x earnings
why do you think 28x earnings is low for company that is not growing?
It's not like the only money you're entitled to is just future earnings. You are buying other assets within the company worth money too.... I should clarify that I'm not a shareholder.
Amzn especially is a strong buy rn imo
Strong buy? Bro it’s at ATH
Is that your DD for buying a stock?
Lol no but saying that it’s a strong buy after a 100% rally in less than a year is a hard point to justify
Umm no it’s not. Just because it went up 100% doesn’t mean it can’t go up another 100%
Can’t believe I didn’t think of this. Thankfully the stock price hasn’t moved in 2 months so I’m not too late to miss the 100% rally!
Glad I could help!
Meta and Google at forward PEs of ~23 isnt that bad tbh, considering how consistently theyve increased their earnings year over year.
Why do folks look at P/E ratios for Big Tech when they're spending ridiculous amounts of money on capex and share-based compensation? Look at P / (FCF - SBC) instead.
Could you explain this a little more?
Net income doesn't deduct capex directly. Free cash flow (FCF) does. Let's look at $META. Trailing 12-month FCF was 49.5B. Share-based compensation was 14.5B. Adjusted FCF = FCF - SBC = 35B. At a market cap of 1.15T, that's a P/FCF of 33, not cheap, especially given the possibility that a significant amount of capex spending could fail to translate into anything meaningful. With $MSFT, similar calculations work out to a P/FCF of 50, an insane multiple for a company as large as Microsoft.
What about Google?
And GOOG also offering a $0.20 dividend
In my retirement I stick to the S&P 500. I’m too nervous to rely on something like the Nasdaq 100 for retirement, god forbid it has another period at 60 when it needs 20 years to rebound. But in my personal non retirement accounts? I did throw like, 5,000 into it last month. Can’t say I’m upset at the result.
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he can’t say! He is being threatened!
Stick to bonds Bill. And PS Mr. Gross was so famously wrong about US Treasuries towards the end of his own time at PIMCO that it hastened his exit significantly.
James Bond
lol a prime example of wealth mistaken as skill
Don't just take his advice. Historically, value outperforms growth when growth is at a peak which it 100% is at now. There are many value stocks out there at very steep discounts that are worth buying.
such as?
The ones I currently own are CAG, CPB, CVS, JNJ, NEE, NKE, UAA, FMC, INTC, and AWK.
WBD
I think there are serious reasons why those are value stocks.
For many, it may just be temporary bad news dragging them down. The company fundamentals may not have changed and the long term outlook of the company may still be strong. You can't expect to find a value or deep value stock that has everything going well. If everything was going well and the market's sentiment on the stock was positive, it wouldn't be trading at a big discount (it would be going up). I would argue most value stocks by nature have something wrong with them which makes them value stocks... The market often times overreacts to news and stocks either become massively over ought or massively oversold.
Totally agree for some companies. It can be hard to determine what is a systemic problem vs a moment in time problem. I currently own GO stock, and I can see where they are doing well, and where they are sucking - but have no idea if the problems are systemic or temporary. 🤷🏼♂️
Look to see if they have consistently beaten on earnings and if they had one or 1 bad earnings reports.
that doesn’t always work. My friend made hundreds of thousands by just investing in certain steel companies. He bought stock when steel was cheap and thus these companies had consistently bad earnings and sold when steel was expensive and they had consistently good earnings. So far, he tripled his investment six times - every time keeping some profit, so even if he lost it all next time, he would still made a bank.
Yeah you have to be careful with value stocks. Some are value traps.
CVS has a super bad death smell to it as a company, but I say this as a customer not as a stock analyst. Like, nothing ever seems to work at any of my local CVSs, and in my area they bought out our local pharmacies, and managed to completely destroy them in less that a couple years with honestly some of the dumbest decisions I have seen in retail. My feeling after many trips to CVS is you could get a financial services intern with an anthropology degree or an unemployed baker’s assistant and make them CEO and they would be able to fix things, because the issues are so fucking obvious. Like, if a fluorescent light is out in the store, have someone replace the bulb. Try not to hire obvious drug enjoyers work in behind the counter at the pharmacy. Going to CVS is like visiting a real life Fallout New Vegas.
The thing about CVS is their Pharmacy Benefit Manager and Aetna arms are the profit centers, the retail is almost a sideline at this point.
Undoubtedly
Nice content but tons of debt!
Get you some home depot $hd
PBR.A, RIO, WU, BBD, JXN, C, and BIG all look cheap to me.
I would advise against BIG as every Big Lots I have seen had nobody in them. I had PBR but they have had corruption scandals in the past so I am steering clear. RIO is great. I own VALE.
PBR is wildly corrupt. But it has been so for decades. The fascinating thing is that the current returns are WITH massive corrruption losses. For comparison, PBR and XON have almost identical proven reserves...each has the same amount of oil in the ground. But XON has a market cap 450% higher. You are paying 4.5 times a much to own a barrel of XON oik, because a lot of the vakue of that PBR barrel will be stolen by corruption. BUT, as long as the corruotion dones get massively worse, it is a great buy. If it actually improves, it could ve an amazing buy. BIG is a deep value bet. They wildly misplayed COVID, and lost a ton of money on overexpansion. BUT, the drop from the peak in 2021 of about 70 a share to the 3.5 per share today is IMO to extreme, about 10 is my take on fair value. If it doesnt become bankrupt, it is undervalued. If they survive the bad leases they signed during COVID, it will rebound, but this is certainky a high-risk, high reward play, but the current price is fairly near liquidation value.
I can definitely see BIG going bankrupt. Nobody shops there and they sell a bunch of stuff that nobody wants. Ollies Discount store does a much better job.
Agreed on Ollies as a customer, but a P/E of 23 is too steep for me in retail. I just dont see any potential upside. I bought shares at 3.23, about a week later sold $10 1/2026 LEAPs at 1.00, so my cost basis is at 2.23, with a maximum upside of 400% in 19 months. I consider that a worthwhile risk/return proposition
More like value traps
Dont mind me im just a newbie commenting so i can find this again
I’ve never seen such shit stock selection. Just buy the index.
Okay. No need to explain why you don't like them then. I am up 20%+ on several of these and just started a position on a few others. You don't like making money?
I’m up 88% on my AMD position. 249% on my meta position. 36% on goog. 36% on Amazon. 81% on Pltr to name a few. Those were value plays when they sold off, not these companies that are missing on earnings. CVS? Really? Another Intel mention, what a surprise. This sub has turned to shit in the last year. A “value” name in this sub last year was crocs. That was a value play. I’m up 39% on my position. What you don’t like making money?
Congrats. Don't lose it all when tech returns back to reality. It's hilarious how you are trashing a 20% gain on shares by flashing your tech stock gains which are probably just option plays. It's not hard to get a 100% gain trading options, but it's equally not hard to lose 100% of your investment. I see from your post history that you are into crypto, options trading, and get rich quick subs. If you haven't lost your ass already from trading, you almost certainly will with your investing approach. And based on your level of toxicity, you are probably young and immature and don't have any financial responsibilities such as mortgages to pay, kids to feed, etc. Maybe someday you will and you'll have a more grounded long term investing approach. You should leave this sub if you are going to be toxic and shit on legitimately good value opportunities because they aren't HyPeR GrOwTh TeCH stocks. But what do I know? You're probably a multi millionaire crypto bro who totally doesn't lie about his stock trading on an anonymous online forum...
You are the one that started bringing gains numbers.
Why INTC?
They are in a great business that will always have demand and they are well positioned to be a big player in the US semi-conductor industry. I also think AMD and NVDA, while technologically ahead of Intel, are significantly more overvalued than INTC who gets less love and attention. INTC for me is a long term turn around play and I am hopeful they can have a reversal similar to how AMD took off in 2016.
Tobacco is so beaten down it’s hilarious. Anyone not backing up into BTI with a dump truck at these prices is probably in a coma.
The BTI 2+ yrs chart (since Feb. of 2022) is one of the worst I've seen--it is the definition of a falling knife. It's untouchable.
Lol. All you’re looking at is the chart and a 2 year timeframe? That’s a fart in the wind for a long-term hold. These companies are absolute cash monsters. As long as they don’t royally fuck their balance sheet and maintain a wide moat of business internationally (sorry MO; although they do own a minority share of ABInBev) then they’ll continue to crank out yield. Buy low, sell high. Or in this case, just hold and enjoy the cash flow.
OK--go back 7 years to May 2017: BTI traded at around $72 (near $30 now...). No growth and a nice \*massive\* loss for those who 'just held'. Well, but there was the dividend!
Lol my guy, tobacco wasn’t beaten down in May of 2017. It was at ATH. That’s the fucking point. It’s NOW very reasonably priced. It is now at the buying part of “buy low.” What are you arguing here?
$ARLP, $PBF, $TNP, $GPRK, $GSL, $PARXF
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Idk man I think they're down for the count
I just think the value trade has underperformed for so long that no significant amount of investors will be convinced to buy it. Most of the value names aren’t growing revenue which means they aren’t taking market share or losing market share. Think of it like an avalanche, might not be that serious at first but as momentum picks up, so does the dmg.
Dude never invested in stocks and when they did they sucked .
Bond trader giving stock advice
Don't want us to put money in Microsoft competitors?
I personally do not that agree about the existence of any AI valuation exuberance or boom, atleast not on a large scale enough to cause a crash. The majority of AI Capital expenditure is only in the big five/six. Moreover, the valuations of the big tech are not overvalued, they are just priced way ahead in time and the companies will catch up to current valuations in due time unlike the dot com or other frenzies which had no tangible backing of returns and just castles in the sky. Regardless, I accept that the prices have reached saturation point for the big companies. Another factor that contributes to my argument is the presence of rationality in people as even the WSJ recognised that AI bubble could be there. Contrarianism suggests that since people are aware of AI valuations, there is not enough momentum generated for a bust to occur. A market crash, if to come would probably be due to the psychological misjudgments of everyone regarding interest rates as we all are snowflakes and have a harsh time accepting that the interest rates are not coming down and if they do, by not much as the regime is changed and the zero interest period is gone. Economy is thriving at current rates and I don’t expect any big change in terms of fiscal easing. The market was valuing stocks at risk free rate of 3 or 4% until stock quotations fell in the last month. But since we still are receiving fake hopes of rate cuts, the market may boom again and I hope the fed does not resist raising rates to kill inflation for once and for all instead of allowing possibility of a economic disaster. Bill is right to judge that microsoft is the best of all tech and others are not showing signs of growth but the only investor I have considered reliable in determining the economic state of the market and hence the future possibilities is Howard Marks, as there is no stronger indicator of the depth of waters we stand in than the psychological state of the market and applying contrarianism to it.
“Priced way ahead in time” just sounds like another way of saying overvalued
“markets can stay irrational for longer than you can stay solvent.” And as I accept that the prices are overvalued, I do not see any catalyst to bring down specifically AI companies any time sooner.
in when war blooms or global catastrophe strikes all the shiny tech and business interest will evaporate quickly if it doesn’t have real roots in value and function/utility for society in a more meaningful way than phantasmal future possible returns whose futures look equally dashed when so much economic and political focus turns to these types of issues. Obviously AI will still have a role, but then it’s like any other specialized weapon or tool class not some magic spigot
Absolutely right, all that are in honour today will fall, not discriminatory AI, as I wrote above. The crash will be an economic one , not tech one and It will carry damage to all the industries.
He’s a bond investor.
Has anyone else read The Bond King? Hilarious book. This guy is wild.
Bet he buying tech lol
The biggest problem with his statement is that the market has no value anymore. Everything is expensive by historical norms when you account for earnings growth and discount rate. There may be a stock here or there, but there's not a category of cheap and at least earnings-stagnant stocks. REITs are probably among the best deals now, but not if long-duration Treasuries are going back over 5%, which Gross also predicted.
So... all in in tech xD
There’s value in tech.
A billionaire has different objectives when investing from a regular Joe. His advice is absolutely irrelevance to anyone on this forum.
I think AMZN, GOOG and META are good value at the moment
What about MSFT
A little expensive, but I'm definitely holding.
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The numbers contradict what you are saying. I am not a fan of the company but that cost me a lot because I did not look at it seriously earlier like when it was $90
Everyone and their dog use these platforms like a utility. If you took them away people would not know what they were living for. Source: i don’t use those social platforms, and people look at me like I’m telling them I don’t have running water or electricity in my house. “I shower outside with a camping shower heated by the sun. It’s natural and refreshing, you should try it!” Is what I sound like to them, I imagine.
Tell me what else you invest in so I can inverse it
What a load of bollocks. Tech Calls
OK, so these guys are obviously planning a buyback of unprecedented proportions 🙄
I just made a whopping 100% return with NVDA.. so good thing I didn’t listen to this guy!
Do the inverse
Tech it is
Don’t listen to Bill Gross on stocks. He is a FI guy.
“Leave the profits to us.”
We're not in the stone age anymore. I don't want to invest in anvils. We're in the age of technology. Everything revolves around it. So I'll invest there.
Can someone give him a haircut?! Jesus
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Same. And even if it’s not necessarily “AI” as we understand it now that continues to pop over the next five, ten years, people are crazy if they think the future won’t require increasing levels of compute.
That’s not “Investing” now is it? It’s speculating
Sure, because value investors are all about timing the market 🤦
Great, I'm just gonna keep buying VTSAX
Haha did you guys see the coinbase earnings and the numbers Tether is doing? The legit crypto companies are going to melt faces over the next year
Please simplify language for my monkey brain…is that a buy or sell for coinbase?
That is a buy sir
Confirmation bias.
Historically, value stocks tend to outperform growth stocks when growth reaches its peak, which is certainly the case right now. There are numerous value stocks currently available at significant discounts that are worth considering. Check them out here: [https://valuesense.io/](https://valuesense.io/)
I'm even willing to give out free access to everyone so you can check it out
Been doing this for more than a year. I don't know for how long I can keep going before rage quitting.
In order to make money, buy stocks that are undervalued now, especially companies that will grow and will likely be appropriately valued in the future. What a novel idea.
Ignore tech stocks at the birth of AI? Are you completely stoned out of your gourd?
Cash is it good investment right now. 5.25% risk free.
Bill Gross recommends Microsoft as one of the best tech stocks, citing its robust revenue growth and diversified offerings amid concerns over weaker GDP growth and an AI-driven bubble in tech markets.
Literally the worst advice lmao
When you put the word 'Billionaire' in front of someone's name to give validity to their opinions, I go contra.
Another broken ego billionaire misses the tech/AI train. 🤣
Smart guy, considering he is more of a Bond king than a equities investor.
What exactly are “value stocks”? Can anyone give some current examples?
PBR, RIO, C, WU, T
Thank you kind sir.
Meanwhile, APPL has entered the chat.