by Travis Johnson, Stock Gumshoe | June 30, 2023 9:00 am
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Always love starting the weekend with you write-up. Thanks again for another quality-content post. The zebra wandering around by the cheetah neighborhood had me laughing. Great analogy. It really is tough being a contrarian. Thanks also for pointing out TTD’s insane stock-based compensation. The company gets so much praise and I’m also a proud owner. So putting things in perspective with meager profitability is what we need to hear to keep us from irrational exuberance and remain cautiously optimistic. Gurufocus has the company listed as “modestly undervalued” with a score of 91/100. High quality, like you said. But not undervalued, so it appears. My favorite reminder of yours was probably to “being an active participant in following the company, not so much in worrying about the day-to-day stock prices.” Stock movements are a lot more confusing than following what a company does. But stock price movements are also soooo difficult to ignore. At least I know that I can sleep well at night.
Great info for us average investor. Thanks
When I read the commentary of someone like Hussman, it makes me wonder what types of securities is he putting his money into.
You can check, his mutual funds are publicly available.
Thanks again Trevor for putting things into perspective. I don’t know why, but as I read, I remembered with perfect clarity the morning of March 9, 2009 when the late Mark Haynes (on CNBC) said to his co-host (her name escapes me at the moment (Burnett maybe) “Doesn’t this seem like the bottom” ie. the Haynes Bottom.
I’m not saying this market today looks like that market which followed the financial crisis, but I don’t know why that memory jumped into my head.
As to valuation, I hear a lot from respected analysts on CNBC that it’s the “magnificent 7 (or 10) that are overvalued and that the rest of the market is valued more like 14X – 15X, thus the recommendations to buy the RSP equal weighted S&P as part of one’s investment strategy.
Could be, though the market is almost always swayed by a few companies at the top. More extreme now, it seems, but not absurdly so. I do find the equal-weight indices more compelling these days.
There was a study in Bloomberg which suggest the bottom 10 of S&P 500 are also pulling their weight
see https://www.bloomberg.com/opinion/articles/2023-07-05/markets-reopen-liquidity-not-ai-may-be-the-second-half-gamechanger?