Company vs. Stock?

[vanzandt]

That's when market sentiments, the "consensus" HAPPEN to agree with the fundies. If the market, the maaaaarket as my prof. used to say decides the other way, the fundies will still go out of the door. And the only reason why RH's share price is more reflective of its fund. analysis is because there is not a lot of big following, big "consensus" putting their own spin on what the company is really worth.

The fund. analysis does materialize in the long run yes, don't get me wrong. If the company is really crap, people or the maaaaarket will eventually realize it's crap regardless how much hype you can build upon it and the PA will eventually reflect it. But in the short run, that's not the case and by the time the real fundamental analysis of a company materializes, it might already too late. As John Maynard Keynes would say in his most famous quote, "in the long run, we are all dead". The idiot argued against the Gold Standard and look at the mess that we are in now.

Well... yeah. I mean to a great extent you're right. Look at TSLA. All hype imo compared to the stock price. Ford has a PE around 8. And where would NFLX be without hype? Good company I suppose, but it certainly doesn't justify a PE of 150 or whatever it is now. Your professor needed to discuss the short interest too. That certainly plays in.

So yes, as a swing or day-trader, fundy's matter not. (earnings events aside) But in the long run, water always seeks its level and companies eventually become fairly valued. Long or short. PE and PEG are still by far the most widely used metrics when evaluating a company's true value.

Also, when black swan type Macro events occur... overvalued company's are the ones that fall the most because money managers know they're overvalued and they don't want to be left holding the bag so its a race for the exits.

Look at it like this...if fundamentals didn't matter, why would analysts across the entire finance industry pour over balance sheets quarterly? Trust me... they matter.

 

[RAMOUTAR]

You know if you and I live like what United States gov. does, spending LOT more than what we bring home and taking on MASSIVE debts and have no plans of paying them back, we would be thrown onto the streets and no banks would ever lend to us and yet when it's a country that does this 1 million times worse than us in collective, somehow it's OK. Everybody has no problem but lend to United States again and again and again and without even much increase in interest rate. Isn't that interesting? Talking about the importance of fundamental analysis. Where is the earning potential? 90% of the products/services are manufactured and outsourced abroad. (I agree totally with Donald Trump on this one in developing homegrown manufacturing and business infrastructure. Businesses, unless producing products to be solely to be exported abroad and have NO domestic market has no need to have that products manufactured abroad.) Where is United States making money from besides sale of weapons? Where is United States' niche besides starting wars with trumped up excuses? What is United States' business model? Nobody cares and nobody knows. But here is another $XX billions in T-Bills!!

I rarely engage in exchanges about the economy. I'm a trader, but I keep my finger on the pulse of macroeconomics, I have to. Our (U.S.) rising debt ceiling, and fiscal irresponsibility irritates me as well, along with millions (I'm sure). Historically, our (US) credit line (debt ceiling) and interest payment due dates (maturities) have always been increased and extended. What saddens me the most? We're (U.S.) are at a party, and our children and grandchildren will be the ones to pay the bill when the party is over.

I'm extremely cautious to maintain my nonpartisan view on the internet and social media, and now that i think of it, I do the same with my family and friends too. No good ever comes out of political and religious conversation, so I'll just stick to economic side.

As far as I'm concerned, aside from a few "government shutdowns" (partisan scare tactics) here and there, the legislative and executive branches will never let the country go "bust"..."we" have become "too big too fail". Coincidentally, GDP #'s come out Thursday. While our GDP grows, the QoQ, and YoY growth rate continues to shrink, as our debt grows.

JSOP I share your frustration, but the fact is, and I'm sure you'll agree, our fiscal policies will never change (much). You're right..."nobody cares and nobody knows". However, the beauty of trading is, we pick our trades, tactics, how we trade and how long we trade for. We just have to remain nimble and be able to shift and change our strategies and tactics on the turn of a dime. Let's not allow the other uncontrollable minutia occupy us!

Happy trading!

 

[jj90]

You all realize that the USA could just default on its debt or restructure. It's not the best option, but it is an option.

At long as someone is willing to roll your debt over and return on funds > carry, debt isn't an issue.

 

[RAMOUTAR]

You all realize that the USA could just default on its debt or restructure. It's not the best option, but it is an option.

At long as someone is willing to roll your debt over and return on funds > carry, debt isn't an issue.

Default is an option, but I believe that would never happen in "this" administration, however, the POTUS has executed the "default" option several times as a businessman via his companies.

If we defaulted, it would be "financial Armageddon"...horrific proportions. To maintain our "too big to fail" status, we've invited China (biggest US bondholder) and Abu Dhabi (biggest shareholder of Citi) to "indirectly" bail us out.

 

[RAMOUTAR]

@vanzandt @JSOP @jj90 @Baron You know, a lot folks bellyache and complain about all that's wrong with ET. I must tell you, I enjoy the "intelligent" exchange of ideas and viewpoints that all of you have brought to this thread. This is what "I believe" should be happening here, not the mudslinging and bashing. Thanks for the exchange folks!

 

[JSOP]

What saddens me the most? We're (U.S.) are at a party, and our children and grandchildren will be the ones to pay the bill when the party is over.

Unless our children continue to play the same game as we do, keep adding to the bubbles to make it bigger and bigger and bigger and pretend that the party will never stop and pass it along to the next generation and with each generation continuing to play the same game to keep the party going to defer bursting the bubble forever. Once the party is over, the bubble is burst though,yes I agree it would be disaster beyond both you and I would ever want to imagine. So the best that we can do is trying to do our best, accumulate as much wealth as possible and leave as little debt as possible to our next generation. One thing good though, once the bubble is burst, it would be the biggest and the longest depression ever and the price level is going to come crashing down and all of the wealth that we can hopefully leave to our children will have multiplied in real purchasing power; they will be rich, relatively speaking.

I'm extremely cautious to maintain my nonpartisan view on the internet and social media, and now that i think of it, I do the same with my family and friends too. No good ever comes out of political and religious conversation, so I'll just stick to economic side.

Nonpartisan is right because both the Rep. and the Dem. have contributed to this insolvency that we are in right now. Dem. maybe less so as at least Bill Clinton had managed to balance the budget and accumulated some surpluses for several years.

 

[RAMOUTAR]

Unless our children continue to play the same game as we do, keep adding to the bubbles to make it bigger and bigger and bigger and pretend that the party will never stop and pass it along to the next generation and with each generation continuing to play the same game to keep the party going to defer bursting the bubble forever. Once the party is over, the bubble is burst though,yes I agree it would be disaster beyond both you and I would ever want to imagine. So the best that we can do is trying to do our best, accumulate as much wealth as possible and leave as little debt as possible to our next generation. One thing good though, once the bubble is burst, it would be the biggest and the longest depression ever and the price level is going to come crashing down and all of the wealth that we can hopefully leave to our children will have multiplied in real purchasing power; they will be rich, relatively speaking.



Nonpartisan is right because both the Rep. and the Dem. have contributed to this insolvency that we are in right now. Dem. maybe less so as at least Bill Clinton had managed to balance the budget and accumulated some surpluses for several years.

In one word...BINGO!

 

[JSOP]

Default is an option, but I believe that would never happen in "this" administration, however, the POTUS has executed the "default" option several times as a businessman via his companies.

Yes, he's the individual version of "Too big to Fail". Sometimes I still have to pinch myself to believe that he's actually the PRESIDENT of the UNITED STATES, the LEADER of the Free World!!!

If we defaulted, it would be "financial Armageddon"...horrific proportions. To maintain our "too big to fail" status, we've invited China (biggest US bondholder) and Abu Dhabi (biggest shareholder of Citi) to "indirectly" bail us out.

Actually no if United States decides to default, it would be the American people actually who would be left holding the bag and basically losing everything that they have ever invested in government-issued securities. 99.75% of the US debt is still held by US domestically. And only 0.25% of the debt is held by foreign powers and within that 25% of it is owned by P.R. China making it the biggest foreign lender but it still only owns 25% of the 0.25% of the total debt that US has managed to incur. Saudi is even less. So if anything happens, it would still be the US taxpayers who would be bailing the US government out and not China or Saudi, unfortunately and fortunately.

 

[RAMOUTAR]

I couldn't resist posting this link. Received this update 30 mins ago...

http://www.cnbc.com/2017/03/29/us-t...uctions.html?__source=newsletter|breakingnews

7 year notes....hmm?