Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Buy the FAANGS Baby! Slow Torture?

Courtesy of Mish.

Here an amusing MarketWatch OpinionNow that FAANG stocks are crashing, which are undervalued?

That title, by Thomas H. Kee Jr., a former Morgan Stanley broker and founder of Stock Traders Daily, says quite a bit about market sentiment.

Let’s Investigate.

Central bank capital infusions dating back to 2013 are exactly what caused this asset bubble, and the liquidity injections have not stopped. This bubble will burst, but probably not today, and the recent selling in FAANG stocks does not appear to be a precursor to an impending market crash.

Looking at the stocks as a group, their influence on the market is tangible, but they have very different relative valuation metrics. For example, Facebook has an immediate and relatively exceptional valuation while Amazon is at the other end, and has virtually no value at these prices.

In between, Apple lacks immediate value, while Netflix is fairly valued, and Google will likely demonstrate an oddity in earnings growth in calendar 2017 that will not be resolved until 2018, distorting its immediate fair value.

Bubble Mentality

I congratulate Kee for having the fourth-best-performing strategy in the world in 2016, according to HedgeCo.

At the same time, I find it interesting to note that Kee knows full well that stocks are in a liquidity bubble that will end, and he is willing to buy the alleged dip in this very real bubble.

I also find it amusing as to what allegedly constitutes a “crash” these days.

Google

Kee labels Google’s valuation as “excessive”.  I certainly agree, but here an amusing alternate P/E evaluation as provided on Nasdaq.Com, anecdotes in blue are mine.


Continue reading here…


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!





You must be logged in to make a comment.
You can sign up for a membership or get a FREE Daily News membership or log in

Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!