Any out there looming that any of you see potentially? Now’s your chance to be a real Nostradamus of sorts if you call it here first…
The whole planet.
Massive global debt build up, equity bubble in the West, made up valuations with bogus calculations, rising populist uprising, Trump boosting all free funds to the war machine. I’m still hedged.
Gotta love stuff like the non-gaap numbers that corporations are twisting around also. Real Estate (at least in my area) is a little too far too fast in my opinion. I am trying to tell people that have sizable US equity exposure to def. be hedged. Whatever derivatives they would like to choose, maybe some gold also.
Are so called “World War III” stocks an interesting speculative play possibly?
Regarding US equity: the Blackrock guy saying what I’ve been saying for awhile; prices high, yet US the lowest growth country, no sign of earnings or Trump economy boosts, in fact economy may slow down due to uncertainty…
huh nope. People have been expecting the end of the world since 2009 and it never comes.
Currently world growth is picking up with the best growth Europe has seen since in like what, 5 years (?), and many emerging economies are starting to do better.
Now is a bad time to be bearish, especially since corporate profits and sales are growing. Oh and there are excellent stocks out there that are cheap.
Check out BMW (trailing P/E of like what, 8 ???). One of the best companies in the world. Valuations have been dropping since like 3 years while the company is improving by almost every imaginable metric.
Are you going to tell me that Apple is overvalued ?
Really, IMO, avoid expensive stocks and stick with common sense, rock solid companies and you should be fine.
i dont know about europe, but us is def overvalued. for us its been the second or third longest bull in the past 150 years or so at 10 yrs old. profits are rising, but prices have risen a lot more. pe is roughly 20x vs average 15x. unemp at cyclical lows, and consumer confidence at all time highs. also the margin debt is at cyclical highs. also someone mentioned the widening gap between gaap and adjusted eps. another point of concern.
BMW trades that low cuz they got a ton of debt. On auto companies or actually anything auto related most will trade at a low PE. They are very cyclical and we are very late in the game. auto sales are at 2007 levels, and the last cycle sales literally got cut in half for the industry, also there are lotsa people leasing due to the low rates, many of those are coming due so used cars will put pressure on new cars. lastly there is a lot of subprime for cars and the number of people defaulting recently rose. there’s a bucnh of articles on this.
also apple is not as much of a no brainer as it used to be. just a few months ago this was trading at fcf multiple of 10x vs now at 15x. historically speaking the multiple is expensive.
US equities are overvalued to the point where buying doesn’t make sense, but it’s not so overvalued that it makes sense to sell everything either. I made some investments in airlines last year (United 4x earnings, Southwest 7-8X earnings) that paid out really well, so I think long-term value plays are still solid even when the market in general is overvalued. Financials will probably be fine too in a high rate environment.
A couple people mentioning Apple, I’ve still got some, but sorta lukewarm on it for above reason. Great stock, but the overall US market 2015-present just keeps getting darker, we keep waiting, but no magic comes.
just buy FB and forget
Dude what are you talking about…
BMW has about 25 % equity on its Balance Sheet and a Leverage that is pretty in line with its peers. Sure that sounds low but it’s the automobile industry so it’s normal.
And I don’t care about that end of the cycle thing. People have been saying that for years, yet BMW continues to grow and beat its previous records, with no sign of it slowing.
My point is that BMW’s performance is not in line with its shitty valuation. Why does a stock loose 2 PE points in like 3 years while his metrics improve ? Right, because of investor sentiment. Which has been wrong. Plain and simple. These things tend to reverse when people grow tired of paying PE’s of 40 for shit technology companies and realise that they have been freaking about about the wrong sectors.
Just my 0.02.
i love these kind of talks on AF! coming in hot straight outta the gate.
I don’t follow this sector but quickly comparing bmw to gm and ford:
D/E for BMW = 199.31
GM= 192
Ford= 488
BMW has far superior EBIT/Int Exp than the other two.BMW’s 5-year cds is ~100bps lower than the other two.
Yeah I have to echo most of this sentiment I think. Seems like we have to be in the 8th or 9th inning of this bull market run for equities. Price and Value only diverge for so long. In regards to BMW, I currently lease one and previously owned 3 of them. They really are an exceptional automobile manufacturer and I have had an overall good experience as a consumer, however, I would really want to know what the auto industry is like in general right now first before I jump in and place bets.
Held some AAPL from 2011 to 2012 but moved on and haven’t really followed the company or stock since. Aside from the FCF multiple being expensive, my question is have they done anything with that S*** ton of cash they were sitting on forever? Increased Div Payout? meaningful/valuable acquisitions?
I don’t follow them closely anymore either, assume they are grinding away in steady state mode. They did a buttload of buybacks (manipulates PE lower) and dividend has been steadily increasing. Their current assets (cash and S/T investments) have actually been increasing, now $103B LOL!
There are still so many emerging markets that could grow into iPhones. The problem is if we get some big global recession, or US/CN conflict, their whole game plan could get stalled a decade. And with the revolt against globalism, they are kinda exposed.
Really, have a look at the numbers’ evolution and compare that with stock’s evolution ; make up our own mind.
I think the market sentiment has to do with the whole diesel thing in Europe, as well as the whole electro-mobility thing.
But in my opinion this is one of those cases where people don’t look enough at what is actually happening in a company because they are too busy theorizing about sectors and macro elements.
Am I the only one who senses something is seriously wrong with Steve Mnuchin? Is he still actually alive? The few things I’ve heard him say are very very weird. Sorry off topic, although if anyone inflates/pops a bubble during this term, it may be this creepy guy!
if steve mnuchin can pull off 50 year bonds or even 100 years bonds without fucking up the yield curve. I am automatically a big fan.
also to be fair. i totally agree that bmw is superior to its competitors in the industry. im not shitting on the company. im shitting on the entire industry. almost all car cos are levered like crazy.
I am not doubting it, as I said, BMW has really refined their manufacturing processes and have a great schedule of re-tooling their product lines. Looking at analyzing company stock in a vacuum though, I’ve maintained the thesis that top down Industry analysis first is best practice and it is difficult to sway me from that because I think great companies in S**** industry ultimately succumb to that.
What the fucking hell, trying to break thru the hell-fuck filter and ditch these goat-fucking stars! Did I do it?
^ Yeah, I see swear words, I broke their algo! 
