stock market was up today...

#10,576
#10,576
Rasputin_Vol said:
Of the FAANG stocks, only two actually engage in trading real products (Apple ans Amazon), and technically, only Apple actually makes real tangible products. How will future Chinese relationships affect Apple manufacturing and supply chains and Amazon's ability to sell products from those same supply chains? Do you foresee our relationship with China being better or worse looking into the near future? How is that reflected in their stock price?
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While I get your point re: Amazon and Google, they don’t sell products isn’t accurate. Neither started there, but both do now to extend and tie together their service offerings.
 
#10,577
#10,577
95 Vol Alum said:
While I get your point re: Amazon and Google, they don’t sell products isn’t accurate. Neither started there, but both do now to extend and tie together their service offerings.
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Facebook, Google and Netflix offer services, but what products/goods do they sell?
 
#10,578
#10,578
Thunder Good-Oil said:
Most likely they have the same vision that the long term trend is much more work from home and rising demand for video. Therefore they are damaging current earnings (which are already under pressure from the C19 economy) by investing heavily now to be the major players for the long haul. Internet companies aren't facing a bleak future so investing in R&D and having bigger capital budgets now is a very good strategy if they have access to the funds to expand their businesses. These aren't rich valuations from sock puppet monkey dot coms. The valuations are from building out more fiber and establishing robust platforms of servers, routers, and other infrastructure. This is a real sea change in the making. Compare these multiples to what Amazon did building their business over 20 years rather than the fake dot coms that were trading banner ads with each other 20 years ago to inflate their recorded revenue when nobody understood their businesses. These are companies with actual track records. Plus there is less of a threat for these companies today from China dumping cheap hardware while getting away with IP theft. No doubt the 90 companies in that basket of internet stocks are royalty and not shady operations.
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I suspect this is correct for a majority, but if we had the full list (which oddly I couldn't find yesterday) I think there would be some delivery companies in the mix.
 
#10,586
#10,586
Rasputin_Vol said:
Of the FAANG stocks, only two actually engage in trading real products (Apple ans Amazon), and technically, only Apple actually makes real tangible products. How will future Chinese relationships affect Apple manufacturing and supply chains and Amazon's ability to sell products from those same supply chains? Do you foresee our relationship with China being better or worse looking into the near future? How is that reflected in their stock price?
Click to expand...

You're speaking of selling physical goods out of a physical inventory. The service sector dominates our economy. Facebook and Google/Alpha sell advertising which they are able to charge a very large premium because they can target specific customers unlike any other has been able. Those multi-million dollar Super Bowl spots went to a very broad, diverse audience. FB and Google are able to deliver ads for Preparation H or Cas Walker's Miracle Salve directly to consumers with itchy butts. That means they can charge considerably more for every set of eyeballs seeing their ads. They have gathered a huge market share and the margins are enormous.

Amazon's most profitable part of their business is web services. Amazon is pretty much a 2020 version of an old school conglomerate that is growing horizontally as well as vertically. In 2020 owning the manufacturing component no longer is critical to be part of a viable business plan. Google tried to be a tech conglomerate more than a decade ago and seems more focused today.

Netflix is overvalued in my opinion. Their revenue will be maxing out unless they start selling advertising. It gets more and more expensive for them to gather marginal revenue rather than seeing outstanding economies of scale. That will especially be true as their subscriber base becomea fully penetrated in China, Japan, India, and other large non-English speaking economies. Plus they face competition from huge players.

Apple has a very reasonable PE and need to keep growing non-PDA revenue. But they do have a large, cultish consumer base and even if they must evolve their supply chain outside of China the markups must be gigantic. I have a throw away, $35 phone that pretty much does what an $800 iPhone can do. Apple will grow by getting into things like wearable medical devices.

The earnings multiple in that chart is probably highly concentrated from the market caps of the 10 largest. The next 80 will see years of growth.

Manufacturing real tangible products is your grand pappy's economy. Bringing back the manufacturing capacity is more about national security and creating blue collar jobs rather than profitability.
 
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#10,587
#10,587
Thunder Good-Oil said:
You're speaking of selling physical goods out of a physical inventory. The service sector dominates our economy. Facebook and Google/Alpha sell advertising which they are able to charge a very large premium because they can target specific customers unlike any other has been able. Those multi-million dollar Super Bowl spots went to a very broad, diverse audience. FB and Google are able to deliver ads for Preparation H or Cas Walker's Miracle Salve directly to consumers with itchy butts. That means they can charge considerably more for every set of eyeballs seeing their ads. They have gathered a huge market share and the margins are enormous.

Amazon's most profitable part of their business is web services. Amazon is pretty much a 2020 version of an old school conglomerate that is growing horizontally as well as vertically. In 2020 owning the manufacturing component no longer is critical to be part of a viable business plan. Google tried to be a tech conglomerate more than a decade ago and seems more focused today.

Netflix is overvalued in my opinion. Their revenue will be maxing out unless they start selling advertising. It gets more and more expensive for them to gather marginal revenue rather than seeing outstanding economies of scale. That will especially be true as their subscriber base becomea fully penetrated in China, Japan, India, and other large non-English speaking economies. Plus they face competition from huge players.

Apple has a very reasonable PE and need to keep growing non-PDA revenue. But they do have a large, cultish consumer base and even if they must evolve their supply chain outside of China the markups must be gigantic. I have a throw away, $35 phone that pretty much does what an $800 iPhone can do. Apple will grow by getting into things like wearable medical devices.

The earnings multiple in that chart is probably highly concentrated from the market caps of the 10 largest. The next 80 will see years of growth.

Manufacturing real tangible products is your grand pappy's economy. Bringing back the manufacturing capacity is more about national security and creating blue collar jobs rather than profitability.
Click to expand...
Where do you see advertising going over the next few months? That justifies this huge run up since April?

And you should know, everything runs in cycles. We've been a service economy for far too long now.
 
#10,588
#10,588
Rasputin_Vol said:
Where do you see advertising going over the next few months? That justifies this huge run up since April?

And you should know, everything runs in cycles. We've been a service economy for far too long now.
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Advertising revenues will decline until the Corona is resolved. Facebook will be under some pressure while the big budget companies boycott, but they'll be fine in the long run.

The new cycle won't ever get back to the old version. Uber/Lyft and other options won't disappear and we go back to everybody owning vehicles that are parked 95% of the time. However Corona has likely extended the transition by many years.

Millennials aren't as interested in accumulating material items like previous generations. They don't even want the stuff that their grandparents filled up their houses with. Heavy furniture and expensive dining room accessories were highly valued and are now looked at as garbage. As wealth transfers it's hard to say what it will be spent on. "Experiences" is kind of the consensus opinion right now, but who wants to experience things like live music, cruises, and world travel right now?
 
#10,589
#10,589
Thunder Good-Oil said:
Millennials aren't as interested in accumulating material items like previous generations.
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Well, I would argue that they don't have the disposable wealth that their grandparents had. I wouldn't necessarily say that they have no interest in it. I say necessarily because I think at one time, they grew up probably of obtaining the American Dream just like everyone else before them and then reality set in. Their jobs got shipped overseas, their currency is being devalued daily and the burden of college tuition and mortgage debt is overwhelming when compared to previous generations.

It is really disgusting to see people slam millennials as being lazy when these kids were dealt the worst hands of anyone since the 1930's.

Thunder Good-Oil said:
They don't even want the stuff that their grandparents filled up their houses with. Heavy furniture and expensive dining room accessories were highly valued and are now looked at as garbage. As wealth transfers it's hard to say what it will be spent on. "Experiences" is kind of the consensus opinion right now, but who wants to experience things like live music, cruises, and world travel right now?
Click to expand...

Maybe, just maybe... those "experiences" will be directed towards building families and relationships. I know, it is far fetched tinfoil hat type stuff.
 
#10,590
#10,590
Rasputin_Vol said:
Well, I would argue that they don't have the disposable wealth that their grandparents had. I wouldn't necessarily say that they have no interest in it. I say necessarily because I think at one time, they grew up probably of obtaining the American Dream just like everyone else before them and then reality set in. Their jobs got shipped overseas, their currency is being devalued daily and the burden of college tuition and mortgage debt is overwhelming when compared to previous generations.

It is really disgusting to see people slam millennials as being lazy when these kids were dealt the worst hands of anyone since the 1930's.



Maybe, just maybe... those "experiences" will be directed towards building families and relationships. I know, it is far fetched tinfoil hat type stuff.
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There might be two sets of millennials. Those with the trust funds and only a sibling or two to share their parents wealth. Then the group that is expanding much faster were born into poverty. So the economic opportunities could be meeting basic needs and servicing high end consumers. But the low end is much different today. They get free phones as well as the government cheese and housing. It's unlikely that citizens will become less dependant on government any time soon. I can't get my arms around where we're heading. The Corona Effect probably lasts for a generation even if a vaccine is developed in the next year. Social distancing might be here to stay.

Even with your currency concerns, the US is still firmly in control.
 
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#10,591
#10,591
Thunder Good-Oil said:
There might be two sets of millennials. Those with the trust funds and only a sibling or two to share their parents wealth. Then the group that is expanding much faster were born into poverty. So the economic opportunities could be meeting basic needs and servicing high end consumers.
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Pretty much what I was saying. The American Dream versus economic reality set in for a lot of these guys.

Thunder Good-Oil said:
But the low end is much different today. They get free phones as well as the government cheese and housing. It's unlikely that citizens will become less dependant on government any time soon. I can't get my arms around where we're heading. The Corona Effect probably lasts for a generation even if a vaccine is developed in the next year. Social distancing might be here to stay.
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So again, this goes back to the behavior of these markets. If you genuinely feel that is the case, then how can you justify this behavior? You even admitted that this is a service economy. Well, what sector of the economy got hit the hardest during this conronavirus? Airlines, restaurants, hotels, cruise lines, health and beauty... The service sector.

Thunder Good-Oil said:
Even with your currency concerns, the US is still firmly in control.
Click to expand...
We're just the dullest knife in a drawer full of spoons. Lets not make it out like the US is running away from everybody else through growth and expanding economy. We're just collapsing less than the EU, Japan, and everybody else.
 
#10,592
#10,592
Rasputin_Vol said:
Pretty much what I was saying. The American Dream versus economic reality set in for a lot of these guys.


So again, this goes back to the behavior of these markets. If you genuinely feel that is the case, then how can you justify this behavior? You even admitted that this is a service economy. Well, what sector of the economy got hit the hardest during this conronavirus? Airlines, restaurants, hotels, cruise lines, health and beauty... The service sector.


We're just the dullest knife in a drawer full of spoons. Lets not make it out like the US is running away from everybody else through growth and expanding economy. We're just collapsing less than the EU, Japan, and everybody else.
Click to expand...

If it's a binary economy of service or manufacturing, then service has dwarfed the other. Domestic factories are practically obsolete. Not needed for profits but good for national security and putting people into jobs.

Again, the earnings multiple in that chart is distorted. A handful of companies with trillions in combined market caps with earnings put on hold produce shocking graphs.

Tech, health care, and financials are all highly viable sectors to lead the economy.

We'll be fine because we've been taken advantage of in a global economy. Developing economies are vulnerable if we transition to be more nationalistic. We also have access to a large pool of labor from below our southern border. It's not at all doom and gloom on our continent.
 
#10,593
#10,593
Thunder Good-Oil said:
You're speaking of selling physical goods out of a physical inventory. The service sector dominates our economy. Facebook and Google/Alpha sell advertising which they are able to charge a very large premium because they can target specific customers unlike any other has been able. Those multi-million dollar Super Bowl spots went to a very broad, diverse audience. FB and Google are able to deliver ads for Preparation H or Cas Walker's Miracle Salve directly to consumers with itchy butts. That means they can charge considerably more for every set of eyeballs seeing their ads. They have gathered a huge market share and the margins are enormous.

Amazon's most profitable part of their business is web services. Amazon is pretty much a 2020 version of an old school conglomerate that is growing horizontally as well as vertically. In 2020 owning the manufacturing component no longer is critical to be part of a viable business plan. Google tried to be a tech conglomerate more than a decade ago and seems more focused today.

Netflix is overvalued in my opinion. Their revenue will be maxing out unless they start selling advertising. It gets more and more expensive for them to gather marginal revenue rather than seeing outstanding economies of scale. That will especially be true as their subscriber base becomea fully penetrated in China, Japan, India, and other large non-English speaking economies. Plus they face competition from huge players.

Apple has a very reasonable PE and need to keep growing non-PDA revenue. But they do have a large, cultish consumer base and even if they must evolve their supply chain outside of China the markups must be gigantic. I have a throw away, $35 phone that pretty much does what an $800 iPhone can do. Apple will grow by getting into things like wearable medical devices.

The earnings multiple in that chart is probably highly concentrated from the market caps of the 10 largest. The next 80 will see years of growth.

Manufacturing real tangible products is your grand pappy's economy. Bringing back the manufacturing capacity is more about national security and creating blue collar jobs rather than profitability.
Click to expand...
Agreed on Amazon & Netflix.

Amazon is one of the best plays out there
 
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#10,596
#10,596
Ernest T. Vol said:
Stupid, but I'll play. What Biden policies are causing this bounce exactly?
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I'd think it will be the opposite effect should he win in November. Especially if he puts Warren in some kind of economic policy/regulation role.

Will a Biden administration be business friendly or business hostile for lack of a better word. Companies never knew where they stood in the Obama administration. Were they going to be taxed more heavily. Were more regulations coming. They believed much of that wasn't going to be a factor during the Trump admin and that's largely why I think the stock market climbed significantly after he won in 2016 starting that same week I think. Trump wanted to lower taxes and cut regulations. The economy was going to open up with less govt restriction and uncertainty.

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