*Investors Blog*
- Thread starter Warstud
- Start date
It has been a bit of a slow go lately for Nvidia. I debated on selling some or most of my shares for FSELX, but I have not done it yet. Over a year the returns are still promising. I guess time will tell.
Every bubble has its rotation. Before 2000 we started with the software and computer companies, and rotated to anyone with a website and a sale pitch, and blew up with the telecoms and there suppliers.
Here we did the chip makers then the hyper scalers and now were at the memory companies.
Micron and Nvida have BILLIONS in quarterly sales, with huge quarter over quarter growth and very firm margins. P/E rations are in the 20's . This has nothing to do with a "bubble".
Look up the meaning of circular financing.
GEVG avg volume 72K, GEVX 295K Similar performance. Picking up some today.
Anyone who thinks AI and AI adjacent companies won't make multi multi billions in the next 5 to 10 years is really missing the boat.
Thats good because there not making any money now. All the hyperscalers which were a license to print there own money are now taking loans via the bond market.
Not saying I am not trading them. Bubbles usually last much longer than most people think they can.
Why wouldn't they take loans while reinvesting their profits? Carrying strategic debt is smart!
Jeremy Grantham recently said that we are in a historic bubble led by AI. For us mean reverting value players that means something.
If the debt is used to fund profitable activities, but none of the hyperscalers are showing a profit on there AI investments thus far. Was also justification for very high multiples - no debt to drag on earnings. So that is gone.
The cash flow had been used historically to buy back stock, which it now isn't. That is already showing up in the stock price.
Predicting the future is hard so I could certainly be wrong, but all the nonsense about how profitable and earnings is all whitewash. Its a spec play in hopes it will be profitable at some future point.
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He is a "perma - bear". Anyone listening to him missed a TON of gains over the years.
Of course he will be right eventually. Even a broke clock is "correct" twice a day.
Well he called 2000 and 2008 markets. GMO also called the recent emerging rotation. They forecast 7 years out. Time will tell. If you're a momentum player or a trader he's obviously not someone you pay attention too. For long term value investors he has a great track record. To each his own and best wishes to all.
No arguments here -- just communicating...
One characteristic of Permabears is they are right at one some point eventually. Then they will point and say "Ah ha! I called it!". The problem with that is they could be wrong 5-8 consecutive years before that moment, and those who listed to them missed out on potentially staggering gains they could have had.
When Permabears Are Right
While historically wrong for most of the time due to the overall upward trajectory of global markets, permabears are occasionally vindicated. Their focus on risk management can help investors exit markets before massive bubbles burst, such as the 2000 dot-com crash or the 2008 financial crisis.
The overall upward trajectory of markets drives gains for disciplined investors over time. He is a smart guy, I have read a lot of his content, but I recognize he is a bear at heart. That's not a criticism, just an observation. Being disciplined and bullish on the markets over time has served me well. I realize what works for me is not the best fit for everyone though. Happy investing to all.
No problem here I didn't mean to sound argumentative. I' m a permabear myself though I like to call it defensive contrarian investing. As Jimmy Rogers says buy when there is blood in the streets and it seems everyone's selling. GMO manages 63 billion. They admittedly take a contrarian bearish view. We all must invest in a way that suits our personality or we'll never be comfortable with it. I appreciate your comments. Good investing to all. Lots of ways to go about it.
