Grand Deja Vu? Techs tanked, BRK surged

[Valuehalla]

The Grand Deja Vu ?

Is the 9th June 2017 the overture for a grand deja vu of 1st Feb 2000? The 1st Feb 2000 was the day when BRK A hits a low of US$ 44.000. (The old B share was at that day US$ 1466). The same day the tech stocks hit record highs and than they start to burst in the mighty bang.

I remember a quote of someone, he said or wrote: "in the same second when the prices of the techs got red in my computer, BRK price got green..."

1st Feb 2000 our beloved Berkshire founds track immediatly, one day later the rocket started and in the same way the techstocks melted down, we saw a mighty Berkshire lift of. One year later, on 1st Feb 2001, BRK reached US$ 70.300. The Techs were defeated.
 
On 9th June 2017 we saw the same direction, also on one singel day: Belaughed Techs like FANG etc. tanked and beloved BRK started to rise. Will it go on ? 17 years later, will Mr. Market double down?

We are fully ammunitioned with 100B, let the elephants come to us. If Warren will hunt an elephant, with a profit of 20 B per year, BRK should minimum double again.

[abyli]

The Grand Deja Vu ?

Is the 9th June 2017 the overture for a grand deja vu of 1st Feb 2000? The 1st Feb 2000 was the day when BRK A hits a low of US$ 44.000. (The old B share was at that day US$ 1466). The same day the tech stocks hit record highs and than they start to burst in the mighty bang.

I remember a quote of someone, he said or wrote: "in the same second when the prices of the techs got red in his computer, BRK price got green..."

Our beloved Berkshire founds track immediatly, one day later the rocket started and in the same way the techstocks melted down, we saw a mighty Berkshire lift of. One year later, on 1st Feb 2001, BRK reached US$ 70.300. The Techs were defeated.
 
On 9th June 2017 we saw the same direction on one singel day: Belaughed Techs like FANG etc. tanked and beloved BRK started to rise. Will it go on ?

We are fully ammunitioned with 100B, let the elephants come to us. If Warren will hunt an elephant, with a profit of 20 B per year, BRK should minimum double again.

I think it is insane to compare FANG to tech stocks in 2000. Facebook and Google are printing money, any industry Amazon goes in, companies panic. Look forward long term, I believe high tech companies are actually cheaper than BRK. Time will tell.

[Mephistopheles]

The Grand Deja Vu ?

Is the 9th June 2017 the overture for a grand deja vu of 1st Feb 2000? The 1st Feb 2000 was the day when BRK A hits a low of US$ 44.000. (The old B share was at that day US$ 1466). The same day the tech stocks hit record highs and than they start to burst in the mighty bang.

I remember a quote of someone, he said or wrote: "in the same second when the prices of the techs got red in his computer, BRK price got green..."

Our beloved Berkshire founds track immediatly, one day later the rocket started and in the same way the techstocks melted down, we saw a mighty Berkshire lift of. One year later, on 1st Feb 2001, BRK reached US$ 70.300. The Techs were defeated.
 
On 9th June 2017 we saw the same direction on one singel day: Belaughed Techs like FANG etc. tanked and beloved BRK started to rise. Will it go on ?

We are fully ammunitioned with 100B, let the elephants come to us. If Warren will hunt an elephant, with a profit of 20 B per year, BRK should minimum double again.

I think it is insane to compare FANG to tech stocks in 2000. Facebook and Google are printing money, any industry Amazon goes in, companies panic. Look forward long term, I believe high tech companies are actually cheaper than BRK. Time will tell.

MSFT, CSCO, INTC, ORCL were all printing money in 2000, though they weren't such great investments.

[abyli]

The Grand Deja Vu ?

Is the 9th June 2017 the overture for a grand deja vu of 1st Feb 2000? The 1st Feb 2000 was the day when BRK A hits a low of US$ 44.000. (The old B share was at that day US$ 1466). The same day the tech stocks hit record highs and than they start to burst in the mighty bang.

I remember a quote of someone, he said or wrote: "in the same second when the prices of the techs got red in his computer, BRK price got green..."

Our beloved Berkshire founds track immediatly, one day later the rocket started and in the same way the techstocks melted down, we saw a mighty Berkshire lift of. One year later, on 1st Feb 2001, BRK reached US$ 70.300. The Techs were defeated.
 
On 9th June 2017 we saw the same direction on one singel day: Belaughed Techs like FANG etc. tanked and beloved BRK started to rise. Will it go on ?

We are fully ammunitioned with 100B, let the elephants come to us. If Warren will hunt an elephant, with a profit of 20 B per year, BRK should minimum double again.

I think it is insane to compare FANG to tech stocks in 2000. Facebook and Google are printing money, any industry Amazon goes in, companies panic. Look forward long term, I believe high tech companies are actually cheaper than BRK. Time will tell.

MSFT, CSCO, INTC, ORCL were all printing money in 2000, though they weren't such great investments.

To say tech is a bubble, we need to estimate their value first. Take Google as an example, market cap is $665 Billion today. Q1 2017 Free cash flow was $7Billion (a quarter), revenue was growing about 22-24% per year. So how much it is overvalued?

[Eye4Valu]

I know Tesla is just as cheap as the FANG stocks! Don't forget about Uber either! If only I had hung on to my AOL shares!

[50centdollars]

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.

[Valuehalla]

50centdollars, great post, THX!

Now BRK is trading P/E 19 to 20, but the potential future P/E is a max of 8 to 10 (if 100 to 150 B acquisition can be realized) Cashflowratios more attractiv: BRK Marketcap is 419 B, Cashflow in 2017 app 35 B. 100 B on hands for doubleling profit and cashflow.

Maybe we are on the eve, Warren will pull the historical 150 B trigger. Berkshire will be the Phoenix of Wall Street! Our old eagle will fly proudly round the highest summit cross.
Latest on Warrens 90th anniversary, Mr Market shall deliver the BIG T (1 Trillion) as our all gift.

[SlowAppreciation]

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.

[KCLarkin]

Nifty Fifty revisited:
https://www.aaii.com/journal/article/valuing-growth-stocks-revisiting-the-nifty-fifty

Slightly underperformed sp500 to 1998. There is some criticism of the methodology IIRC. Specifically, there may be hindsight bias since there was no definitive Nifty Fifty list.

[plato1976]

Is 35B free cash flow, or operating cash flow?
If the later it's not that impressive against the marketcap 419B

50centdollars, great post, THX!

Now BRK is trading P/E 19 to 20, but the potential future P/E is a max of 8 to 10 (if 100 to 150 B acquisition can be realized) Cashflowratios more attractiv: BRK Marketcap is 419 B, Cashflow in 2017 app 35 B. 100 B on hands for doubleling profit and cashflow.

Maybe we are on the eve, Warren will pull the historical 150 B trigger. Berkshire will be the Phoenix of Wall Street! Our old eagle will fly proudly round the highest summit cross.
Latest on Warrens 90th anniversary, Mr Market shall deliver the BIG T (1 Trillion) as our all gift.