Author Topic: Grand Deja Vu? Techs tanked, BRK surged  (Read 15634 times)

Valuehalla

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Re: Grand Deja Vu? Techs tanked, BRK surged
« Reply #10 on: June 10, 2017, 09:33:32 AM »
35 B is my estimated CF from operating activities in 2017: For further reference see the 2016 AR on page 40:

http://www.berkshirehathaway.com/2016ar/2016ar.pdf

In the past 10 years this figure was growing app. 13,5 % per year = doubling all 5 1/2 years.
« Last Edit: June 10, 2017, 09:42:26 AM by Valuehalla »
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Valuehalla

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Re: Grand Deja Vu? Techs tanked, BRK surged
« Reply #11 on: June 11, 2017, 06:06:48 AM »
WSJ:
"Apple, Facebook, Amazon: Suddenly, Tech Stocks Are Getting Slammed
Five tech and internet stocks had accounted for 41% of the S&P 500’s advance this year"

https://blogs.wsj.com/moneybeat/2017/06/09/suddenly-tech-stocks-are-getting-slammed/

or use this non-subscriber-link:

https://archive.is/Aox5J
« Last Edit: June 11, 2017, 08:54:23 AM by Valuehalla »
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50centdollars

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Re: Grand Deja Vu? Techs tanked, BRK surged
« Reply #12 on: June 11, 2017, 10:07:51 AM »
The nifty fifty stocks in the 70's were some of the best companies in the world. They all printed money too.

In 1972, Disney traded at a P/E of 82, JNJ traded at 62, KO at 48 and GE at 26. Once the bear market started in 1973, these P/E multiples collapsed.

By 1982 the P/E's were the following: DIS 20.7 ( -75%) , JNJ 17.8 (-71%), KO 13.4 (-72%), GE 12 (-55%).

Lets take a look at their earnings.

            1972                 1982
Dis        $0.03               $0.06           +100%
JNJ        $0.04               $0.17           +297%
KO        $0.06               $0.16            +149%
GE         $0.06               $0.17          +187%

So even though earnings continued to increase over the next 10 years, their P/E's collapsed and never returned to those multiples.

I thought I read somewhere that if you had held most of the nifty fifty even at their peak multiples until today you still would have beat the S&P. Not sure where I read this (or if it's even true), but just something to consider.

Oh ya but who held on? If you held the stocks I listed above to today you're a millionaire or even a billionaire depending on how much you bought. In 1972, DIS was trading at $2.20 and by 1982 it was $1.32. If you bought in 1972 at the top, it was still a terrible investment for the next 10 years. If you held to today, yeah you made a killing but how many people held? I would guess very few. My point is that price matters.

Like Howard Marks says, "you can buy the best companies in the world and lose money and you can buy the worst companies in the world and make money."

Just out of curiosity, does anyone know a company in the history of the world that has justified a P/E of over 100?
« Last Edit: June 11, 2017, 10:09:38 AM by 50centdollars »
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abyli

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Re: Grand Deja Vu? Techs tanked, BRK surged
« Reply #13 on: June 11, 2017, 11:17:39 AM »
The nifty fifty stocks in the 70's were some of the best companies in the world. They all printed money too.

In 1972, Disney traded at a P/E of 82, JNJ traded at 62, KO at 48 and GE at 26. Once the bear market started in 1973, these P/E multiples collapsed.

By 1982 the P/E's were the following: DIS 20.7 ( -75%) , JNJ 17.8 (-71%), KO 13.4 (-72%), GE 12 (-55%).

Lets take a look at their earnings.

            1972                 1982
Dis        $0.03               $0.06           +100%
JNJ        $0.04               $0.17           +297%
KO        $0.06               $0.16            +149%
GE         $0.06               $0.17          +187%

So even though earnings continued to increase over the next 10 years, their P/E's collapsed and never returned to those multiples.

I thought I read somewhere that if you had held most of the nifty fifty even at their peak multiples until today you still would have beat the S&P. Not sure where I read this (or if it's even true), but just something to consider.

Oh ya but who held on? If you held the stocks I listed above to today you're a millionaire or even a billionaire depending on how much you bought. In 1972, DIS was trading at $2.20 and by 1982 it was $1.32. If you bought in 1972 at the top, it was still a terrible investment for the next 10 years. If you held to today, yeah you made a killing but how many people held? I would guess very few. My point is that price matters.

Like Howard Marks says, "you can buy the best companies in the world and lose money and you can buy the worst companies in the world and make money."

Just out of curiosity, does anyone know a company in the history of the world that has justified a P/E of over 100?

When Google went public in 2004, it was around P/E 100. From there, it went up 1800%.

longinvestor

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Re: Grand Deja Vu? Techs tanked, BRK surged
« Reply #14 on: June 11, 2017, 11:17:49 AM »
The nifty fifty stocks in the 70's were some of the best companies in the world. They all printed money too.

In 1972, Disney traded at a P/E of 82, JNJ traded at 62, KO at 48 and GE at 26. Once the bear market started in 1973, these P/E multiples collapsed.

By 1982 the P/E's were the following: DIS 20.7 ( -75%) , JNJ 17.8 (-71%), KO 13.4 (-72%), GE 12 (-55%).

Lets take a look at their earnings.

            1972                 1982
Dis        $0.03               $0.06           +100%
JNJ        $0.04               $0.17           +297%
KO        $0.06               $0.16            +149%
GE         $0.06               $0.17          +187%

So even though earnings continued to increase over the next 10 years, their P/E's collapsed and never returned to those multiples.

I thought I read somewhere that if you had held most of the nifty fifty even at their peak multiples until today you still would have beat the S&P. Not sure where I read this (or if it's even true), but just something to consider.

Oh ya but who held on? If you held the stocks I listed above to today you're a millionaire or even a billionaire depending on how much you bought. In 1972, DIS was trading at $2.20 and by 1982 it was $1.32. If you bought in 1972 at the top, it was still a terrible investment for the next 10 years. If you held to today, yeah you made a killing but how many people held? I would guess very few. My point is that price matters.

Like Howard Marks says, "you can buy the best companies in the world and lose money and you can buy the worst companies in the world and make money."

Just out of curiosity, does anyone know a company in the history of the world that has justified a P/E of over 100?

The history of the world ended already with FANG. And there's more, TSLA, Uber etc. They have won and are about to take it all. They are coming after my money also.

The future ain't what it used to be.
Yogi Berra


John Hjorth

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Re: Grand Deja Vu? Techs tanked, BRK surged
« Reply #15 on: June 11, 2017, 12:10:18 PM »
The history of the world ended already with FANG. And there's more, TSLA, Uber etc. They have won and are about to take it all. They are coming after my money also.

The future ain't what it used to be.
Yogi Berra

It's actually good with some humor on the board at these market levels! : - )
« Last Edit: June 11, 2017, 12:12:30 PM by John Hjorth »
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petec

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Re: Grand Deja Vu? Techs tanked, BRK surged
« Reply #16 on: June 12, 2017, 12:48:36 AM »
Oh ya but who held on? If you held the stocks I listed above to today you're a millionaire or even a billionaire depending on how much you bought. In 1972, DIS was trading at $2.20 and by 1982 it was $1.32. If you bought in 1972 at the top, it was still a terrible investment for the next 10 years. If you held to today, yeah you made a killing but how many people held? I would guess very few. My point is that price matters.


It's not just "who held on", it's "who lived long enough to take advantage".   Even if the Nifty 50 outperformed from 1972 to today, give or take half the people who were alive in 1972 are dead today and haven't been able to spend the windfall.   Long term investing has its limits.

Cardboard

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Re: Grand Deja Vu? Techs tanked, BRK surged
« Reply #17 on: June 12, 2017, 02:41:19 AM »
Good point Petec. It remains useful to look at P/E as a crude indicator of the number of years it takes to get your investment back. Of course, high growth makes it more complex and could make justify almost anything but, it is always after a correction that all of a sudden, the growth trajectory tends to be revised downwards.

I mentioned before that the only stock from 1999-2000 that has measurably surpassed its high of that era is Amazon. Most other stocks are still below and a few such as MSFT slightly above. And the other 3 from the FANG did not exist at the time. So I find it amusing that investors today consider the FANG's as can't miss stocks despite their valuation, market caps and all operating in a cyclical business: advertising, retail, entertainment.

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Valuehalla

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Re: Grand Deja Vu? Techs tanked, BRK surged
« Reply #18 on: June 12, 2017, 02:05:17 PM »
2nd Day Deja Vu is done:

Techs tanked, BRK rised
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Jurgis

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Re: Grand Deja Vu? Techs tanked, BRK surged
« Reply #19 on: June 12, 2017, 02:19:29 PM »
So CoBF devolved into a forum of FANG-hate and backslapping based on 2 days of market behavior.


Can the last serious investor turn off the light please?