mardi 4 août 2020

The future looks bright

Price of a security says little about its valuation (I hope you understand what that creap means because I dont).
Smart investors (not the ones like me), look in the future. Way way far in the future. Maybe a century ahead... They are not being bothered by recessions, crisis, competition, vomiting high prices, madness speculation and little details like so. No, they try to predict the future.

Its funny if I compare this with meteorolgy predictions. During July, the predictions over a duration of less than one week, I cant remember one which came to fruition. Raining tomorrow; lots of wind in the afternoon, etc. What do you do as a person who doesnt have the skills to master those math models predicting the weather over the next 3 days? Well, you read the predictions and plan accordingly; you say to yourself these guys must know something; its complicated stuff, you dont know it, so you have nothing to say about it.

Its probably the same with securities. These guys are having skills on future prediction you dont. So they tell what to do and why a stock is at a certain level. Its not because it sells products or makes money (or in case of TESLA because it makes not much and sells not that many cars). No, its about the future. Way way far in the future. Decades far...

I did came about 2 articles here and here talking Amazon blowout earnings (ok, this is not about TESLA stock but its about his older brother, Amazon, another huge stock bubble). Like TESLA, Amazon is not about today. I understand that. Its about the future. 

Similar to 2008, when US banks were about the future (and trading at high valuations despite the risky investments in the real estate market), some tech behemoths today, like Amazon or Shopify ecommerce web sites, are trading at rare oxygen stratospheric levels. I even do see analysts calling for 2$ trillions capitalisation being in the cards; and probably soon. Well, that is possible and I would go out and say 10$ trillions is possible as well; hack, 100$ trillions is not a problem as long as its about the future.

These guys are doing recommendations for you (they are experts serving crap to you).

I wouldn't say that Amazon is undervalued at current prices, but fairly valued is a reasonable assessment when considering the quality of the business. Buying a great company at a fair price can be a straightforward strategy for superior returns, and Amazon looks well-positioned to continue delivering market-beating returns in the years ahead.
Amazon remains cheaply valued, making this stock a worthy addition to most portfolios.

Here you are, the two stars of the planet Earth: Amazon and Tesla! What a wonderful world!




Speculate accordingly!

 
 

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