Anybody Buying Yet? Where’s the Bottom?

FREAK said:
Anybody have thoughts on Carvana? I'm considering some put options. Seems like they're riding the highs from covid? I'm assuming they're having some serious headwinds with new car production picking up and used car prices coming down. I recently saw that vroom is planning to end it's used car ecommerce side of the business.
View attachment 359810

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No interested in owning at this valuation. It seemed to get a bump on tariffs, which would hit car manufacturers more than the used cars. You are looking to buy puts, but they are horribly expensive. If I was forced into it, I would probably spread at 260-230. It is pricing in a 7% move. Cost is about $11.
 
jryoung said:
The last lot I have goes long term in late April, I'm tempted to sell now, but don't have any short term losses to offset. I just need no bad news until them and to schedule an earnings call for first week of May LOL.
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Good luck. The price is outrageous and insiders have been selling for a while. Karp is just pumping the retail crowd, much like Musk did on Tesla. Tough place to be in. Maybe sell May calls. There are a few stocks like this one in the same position.
 
SAJ-99 said:
Good luck. The price is outrageous and insiders have been selling for a while. Karp is just pumping the retail crowd, much like Musk did on Tesla. Tough place to be in. Maybe sell May calls. There are a few stocks like this one in the same position.
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Just when you're hoping to remain quiet.....it's like the "The Madden Cover Curse"

Screenshot_20250208-061930.png
 
Forgive me if this has already been discussed recently, but I haven’t posted or read up on this thread in years.

I am overwhelmingly a passive investor and I very likely won’t be making any changes anytime soon, but just curious about opinions mostly.

To set the stage, my assumptions:
-The aggregate stock price of the 10 largest companies on the S&P 500 have more than tripled in price since the market low in 2020 (see graph below).
-These giant companies haven’t revolutionized any major product or service during this period (OK there is AI…but perhaps the impact is significantly overestimated)
-Instead, nearly-free money from the FED for years resulted in massive share buy-backs by the companies, buoying their stock price (cut share supply, boost earnings).

Question: How much of price increase is due to real added value by higher earnings (dividends), and how much is pure speculation?

My hunch is it is much more speculation than earnings. Any one want to take a crack?

If it is mostly speculation, perhaps selling short on the top 10 and reap the next market correction?
6E2FE59F-88B8-465F-AC01-BD5D967E9891.jpeg

Bold prediction: the index price will drop below 6000 before it gets above 9000.
 
Pucky Freak said:
Forgive me if this has already been discussed recently, but I haven’t posted or read up on this thread in years.

I am overwhelmingly a passive investor and I very likely won’t be making any changes anytime soon, but just curious about opinions mostly.

To set the stage, my assumptions:
-The aggregate stock price of the 10 largest companies on the S&P 500 have more than tripled in price since the market low in 2020 (see graph below).
-These giant companies haven’t revolutionized any major product or service during this period (OK there is AI…but perhaps the impact is significantly overestimated)
-Instead, nearly-free money from the FED for years resulted in massive share buy-backs by the companies, buoying their stock price (cut share supply, boost earnings).

Question: How much of price increase is due to real added value by higher earnings (dividends), and how much is pure speculation?

My hunch is it is much more speculation than earnings. Any one want to take a crack?

If it is mostly speculation, perhaps selling short on the top 10 and reap the next market correction?
View attachment 360590

Bold prediction: the index price will drop below 6000 before it gets above 9000.
Click to expand...
Not sure what that chart is, but I can give you numbers for the S&P 500. We can use trailing PE as the proxy for "speculation" in this case. I picked EOY 2019 as a stating point because I don't want Covid to distort numbers.

12/2019 S&P price was 3230, earnings for that year totaled $157.12/sh. PE was 20.6x

12/2024 S&P Price was 5881 and earnings look like they will come in at $233.28/sh. PE is 25.2x.

Earnings went up 48%, PE went up 22%. Yes, a lot of it is PE expansion, but earnings have gone up as well. For EOY 2026, Earnings are estimated at $268/sh. Today, forward PE is 22.8x.
 
SAJ-99 said:
Not sure what that chart is, but I can give you numbers for the S&P 500. We can use trailing PE as the proxy for "speculation" in this case. I picked EOY 2019 as a stating point because I don't want Covid to distort numbers.

12/2019 S&P price was 3230, earnings for that year totaled $157.12/sh. PE was 20.6x

12/2024 S&P Price was 5881 and earnings look like they will come in at $233.28/sh. PE is 25.2x.

Earnings went up 48%, PE went up 22%. Yes, a lot of it is PE expansion, but earnings have gone up as well. For EOY 2026, Earnings are estimated at $268/sh. Today, forward PE is 22.8x.
Click to expand...
Thanks. The chart is aggregate 10 largest companies, i.e. a theoretical “S&P 10” ETF. Price of $2600 on the eve of the 2020 crash, and $6900 today. That is a price jump x2.65, whereas S&P price jump over the same span is x1.48, a substantial difference.

The S&P 500 P/E change is helpful - what I really need to do is calculate P/E for the top 10.
 
Pucky Freak said:
Thanks. The chart is aggregate 10 largest companies, i.e. a theoretical “S&P 10” ETF. Price of $2600 on the eve of the 2020 crash, and $6900 today. That is a price jump x2.65, whereas S&P price jump over the same span is x1.48, a substantial difference.

The S&P 500 P/E change is helpful - what I really need to do is calculate P/E for the top 10.
Click to expand...
The S&P top 10 factsheet says 28x.

It gets harder to make a direct comparison the more narrow you get. Nvida, Broadcom, and Tesla are in the top 10 today but weren't then. AI has a healthy amount of speculation, but also earnings. The faster growing (higher PE) companies replace the slower growing ones so it just gets messy.

You could measure the increase in percentage in market cap of the top 10. I did this for a firm about 5 years ago, but no longer have access to the database that makes it easy to calculate. The end result was it is interesting to look at (and do) but it doesn't give actionable information other than move down the cap spectrum. And if you did that 5 yrs ago on that belief it would have been a bad idea. There is no S&P 490 etf. Closest you can get is SPXT, which excludes the tech sector, or maybe the equal weight etf.

What you see is a condition of the US economy. America loves oligopolies and a good story. It has always been that way a little, but even more so now.
 
Pucky Freak said:
Forgive me if this has already been discussed recently, but I haven’t posted or read up on this thread in years.

I am overwhelmingly a passive investor and I very likely won’t be making any changes anytime soon, but just curious about opinions mostly.

To set the stage, my assumptions:
-The aggregate stock price of the 10 largest companies on the S&P 500 have more than tripled in price since the market low in 2020 (see graph below).
-These giant companies haven’t revolutionized any major product or service during this period (OK there is AI…but perhaps the impact is significantly overestimated)
-Instead, nearly-free money from the FED for years resulted in massive share buy-backs by the companies, buoying their stock price (cut share supply, boost earnings).

Question: How much of price increase is due to real added value by higher earnings (dividends), and how much is pure speculation?

My hunch is it is much more speculation than earnings. Any one want to take a crack?

If it is mostly speculation, perhaps selling short on the top 10 and reap the next market correction?
View attachment 360590

Bold prediction: the index price will drop below 6000 before it gets above 9000.
Click to expand...
A lot of institutional money was pulled from the market and put into real estate. When that moves back in it will push things higher. If it comes on the heels of a "correction" it will be a short lived correction.
 
jryoung said:
The last lot I have goes long term in late April, I'm tempted to sell now, but don't have any short term losses to offset. I just need no bad news until then and hopefully they schedule an earnings call for first week of May LOL.
Click to expand...
To bad FREAK deleted his ID.

www.cnbc.com

Palantir plunges after CEO Karp changes share sales plan, Pentagon budget cut report

The Trump administration is engaged in a wide-ranging effort to slash government spending and reduce the number of federal workers.
www.cnbc.com www.cnbc.com
 
Substantial different in 1-year versus last month with some stocks:
Amazon, AMZN +33%,-4%
Alphabet,GOOG +31%,-7%
Tesla, TSLA +83%,-17%
Nvidia, NVDA +101%, -0.6%
Broadcom, AVGO,+84%, -6%
 
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