To think people are expecting the bubble to pop like it did in the dot com era
Today’s Mag 4 P/E ratios:
$META – 16x
$GOOGL – 17x
$AMZN – 24x
$MSFT – 25x
Dot-com bubble peak P/E ratios:
Microsoft – 73x. Cisco – 200x+. Yahoo – 800x.
The Nasdaq as a whole traded at a P/E of 200 at the peak of the dot-com bubble.
Today’s “bubble” is trading at 16-25x earnings on companies generating hundreds of billions in real free cash flow.
Today we have the most profitable companies on earth,
$MSFT $GOOGL $META $AMZN reported beats on earnings, and you think we are in a bubble.
@bryptokenneth3 It just vertically reprices now and then trades like ball torture inbetween those instances. Also the correlation breakdown people are going to be reminded quickly that a few big days can keep the longer term correlation strongly positive
Less appreciated reason market PEs are structurally high is because of the US deficit. The supply of treasuries has gone up 50% over the last several years & supply of equities has not. The 60/40 investor is forced to pay up for equities to maintain their allocation target.
@0xaporia You have to have some objective exit condition before you enter the trade no serious speculator would disagree with that. Stop losses can serve that purpose. While risk may not be a property of price, price is a property of PnL - the only reason anyone is here in the first place
Making it for me aint no damn numbers on a screen, its when I can buy my wife the poney she always wanted, Sugarplum the sweet steed…
Thats making it, Fucker
While the rally out of the bottom was an outlier in strength, the fact that the market bottomed where it did was a base rate expectation
https://t.co/ZjYrWHOhLT
@AviFelman It's the only approach to market participation that is long vol with long term positive Carry. Basically Anti-beta. Most trades are a wash/losses but the outliers they do capture (eg. Oil) compensate. They outperform equities in every meaningful drawdown 1970s, 2000s, 2022