A Quote by Marc Andreessen
Today's stock market actually hates technology, as shown by all-time low price/earnings ratios for major public technology companies.
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Today's stock market actually hates technology, as shown by all-time low price/earnings ratios for major public technology companies
I buy stocks when they are battered. I am strict with my discipline. I always buy stocks with low price-earnings ratios, low price-to-book value ratios and higher-than-average yield. Academic studies have shown that a strategy of buying out-of-favor stocks with low P/E, price-to-book and price-to-cash flow ratios outperforms the market pretty consistently over long periods of time.
It's one of the fundamental principles of the stock market: When interest rates go up, stocks go down. And along with financial companies and cyclicals, technology companies - with their sky-high price-to-earnings multiples - should be among the biggest losers in an environment of rising rates.
The other dynamic keeping the stock market up - both for technology stocks and others - is that companies are using a lot of their income for stock buybacks and to pay out higher dividends, not make new investment,. So to the extent that companies use financial engineering rather than industrial engineering to increase the price of their stock you're going to have a bubble. But it's not considered a bubble, because the government is behind it, and it hasn't burst yet.
Going public today is fraught with peril on many levels. One is earnings guidance. If you miss guidance, the stock price becomes very volatile. Short sellers can put a tremendous downward pressure on the stock.
The Stock Market was down today. Two major businesses declared bankruptcy, consumer spending is at an all time low - in other words, Bush is back on the job.
Be aware of the level of the stock market. Are yields low and PE ratios high?
If you can follow only one bit of data, follow the earnings - assuming the company in question has earnings. I subscribe to the crusty notion that sooner or later earnings make or break an investment in equities. What the stock price does today, tomorrow, or next week is only a distraction.
Generally, the technology that enables disruption is developed in the companies that are the practitioners of the original technology. That's where the understanding of the technology first comes together. They usually can't commercialize the technology because they have to couple it with the business model innovation, and because they tend to try to take all of their technologies to market through their original business model, somebody else just picks up the technology and changes the world through the business model innovation.
Approaches to determining stock values vary, but fundamentally, each company judging itself undervalued is saying that its future stream of earnings justifies a higher price than the stock market is willing to accord it.
Calculate a stock's price/earnings ratio yourself, using Graham's formula of current price divided by average earnings over the past three years.
Tech stocks were the cubic zirconium of the market. They looked good and were sexy, but they just were a way for the company selling them to make money. That's always going to be transient in terms of the stock market. What's real is that companies have to compete. Technology used well is a great tool to enable that if only because most companies dont use technologies well.
Are you going to divest in the banks and pension funds? Plenty of people are willing to invest in stock of those companies. You can argue that when a lot of people divest, it makes the stock price artificially low, which makes their price-to-earnings ratio more favorable, which makes it a better investment for the people who don't give a damn - - and is it really going to change corporate behavior? It begins to create a climate of antagonistic opinion, the result might be that the corporate executives will retreat even more into their own selfjustifying narratives.
The stock market really isn't a gamble, as long as you pick good companies that you think will do well, and not just because of the stock price.
The Web and new technology offer more opportunities to reach a world market at a lower price. Today, a person can start a business at home and reach the world market.
On Sept. 12, 2016, there was a momentary realignment in the constellation of global business. For the first time, the five largest public corporations in the world by market capitalization were all technology companies: Apple, Alphabet, Microsoft, Amazon.com, and Facebook.
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