Share Picks 2022

Disney is now cheaper than it was 5 years ago.... with Bob Iger back in charge we simply have to be approaching some kind of a bottom. But the SP keeps falling.... soo what do I know? anyway for now, I'm hanging on grimly to the couple of shares I have. (I'm underwater by about 30%)

They're penny stocks

https://trader.degiro.nl/trader/#/products/16073621/overviewIt hasn't been removed from Degiro, just unindexed from their search.

Typing 16073621 into the appropriate place in the address bar of another product will also get you there if you'd prefer to not follow a link.

You do realise Stocks are only worth what their future earnings discounted to net present value (NPV) are worth? don't you?!

So if a stock such as Amazon was once priced at $174, and is now priced at $87, this means nothing. Absolutely nothing!!

Amazon (& every other company) is only worth, what it's future earnings will be discounted to, in today's NPV.

That discount rate is directly proportional to the interest rate, and since interest rates are going to go up further from now (from 4.25 % to 5.25% at least according to the Fed in the next 6 months, so by an increase of ~20-25% relatively), this implies the NPV of all companies future earnings (estimates) will fall by a proportional amount.....

Also, when interest rates go up in a time of high inflation, like we have now, so does the cost of servicing debts, and this affects people's, companies' & countries' spending, & spending power.

So, we can fairly reliably predict:

1. future earnings NPV will fall by another ~20% from current levels in the next 6 months

2. Actual earnings will also fall due to lower consumer & corporate spending

3. P/e ratings of companies will likely fall closer to recession level P/E levels from the highly overvalued p/e levels which persisted for the QE & low inflation years, which is now well & truly over. (E.g. to a CAPE level of say~16-18 , from the current inflated CAPE levels of ~27)

https://ycharts.com/indicators/cyclically_adjusted_pe_ratio#:~:text=S%26P%20500%20Shiller%20CAPE%20Ratio%20is%20at%20a%20current%20level,28.94%25%20from%20one%20year%20ago.

We are now in a Quantitive Contraction, high inflation & higher interest rate environment. This started a year ago. Share prices need to fully reflect this. They don't yet imho. Until they do, they will continue to fall.....

So buckle up, there's a bit more to this bear yet imho.

Inflation was brought about by money printing during Covid. This printing has stopped but the inflation still lingers on. There's a huge physiological effect to Inflation that takes time to eliminate. You might be surprised how quick it returns to normal levels.

(BTW - I do understand the concept of present value of the sum of futures cash flows.)

Might be time for Jeremy to come up with a new video, that one has been circulating in various forms since this time last year... (he was proven right as it happens), buts its nothing but clickbait now.

He said "Nasdaq needs to fall by 50%"... its fallen by 40% now.

What people are really interested in now, is will the Fed have to continue to raise interest rates to curb inflation or have they done enough ?

Tesla $117 pre market

I'd also add that the Fed thought inflation was transitory for months and months when it *clearly* wasn't.

My point being that the Fed can change their mind on a dime. (Not saying rates are going back to zero), but a lot of damage has already been done, just read a few earning reports and you'll see this, that's not to says stocks won't go lower but some have already likely bottomed.

Anyway, you know your close(r) to the end when analysts are downgrading most stocks / S&P targets.

Christ Tesla at $109 now. It was $309 just 3 months ago. Anyone care to estimate what it's actually worth?

It's sales per share was $21.72 at the end of last quarter (Sept 22). In Sept '18 this figure was $4.49. So a 5x in 5 years.

It may be that tomorrow!

It's now $106 in after hours trading.

Got an email from degiro today that informed me of the sale of all my shares of Brookfield Renewable Partners LP...

Complete news to me!

Anyone either in a similar situation, or better still, have a clue what might be going on!!

For the Value investor Tesla is a buy at anything under $120. Tesla have several distinct advantages over the other Car makers. They have zero advertising costs, their manufacturing processes take several hundred (yes hundred) steps less due to their casting technology. Basically they have figured out how to cast the chassis and shell of their cars, no other manufacturer has cracked this one. They own large amounts of intellectual property wrt charging and battery tech that other manufacturers must pay them for.

Problem many folks have with Tesla is they missed the boat and are searching for the next tesla amongst those other rubbish EV companies. Sorry Con padres but the boat has sailed, you are now looking at a different investment in Tesla.

Musk will turn twitter into a cash cow, companies like that need a strong leader (madman or not) he is that. His first week at twitter he asked staff the simple question "what have you achieved this week". That hits right to the bone of his ethic, and it is why he gave half the staff the road. I bet Meta would be a much leaner company too if they shed half f there 87,000 workforce!!

I think many will look back on the current period as a missed opportunity to get into quality stocks at low prices - Google, Amazon, Apple are all well priced for lots of upside.