Trade Findings and Adjustments 02-23-23
Why do some stocks that had great earnings not continue up?
- Those stocks already had a good run over the last quarter
- Looking ahead, it’s hard to justify buying into future catalysts that aren’t there for the market.
- Profit taking on a good short term bullish quarter
What IS the next catalyst?
- The next interest rate hike being 0%
So what if stocks keep falling down again?!
- Enjoy another opportunity to buy more shares again
- Protection has been on since earnings!
Price vs Value
- Stocks run on emotion in the short term and value in the long term
- Price is short term, value is long term
- Changes in stock price isn’t always logical or based on fundamentals
- Value is ALL about fundamentals
- Value: how well a company delivers profit, income, growth to share holders
- Look at stocks as COMPANIES
- When there’s a sale, you buy more
- You know when companies shares are on sale when you understand the value.
- “A bubble is when there is no sustainable relationship between the value and the price of a company.” – Warren Buffet Accounting book
Stocks vs Gold
- Companies GENERATE income, profit and growth.
- GOLD generates what? How do you profit from gold?
- You sell it at a higher (hopefully) price than you bought it.
AAPL vs PTON
- AAPL has shown for decades that they can deliver value to share holders.
- PTON basically was showing for the first time that they could sell some products
- How has AAPL delivered value to shareholders over time?
- Innovate with new products (iphone, ipod)
- In doing so, they created new markets and revolutionized markets for audio players and phones
- Growth into new markets of other countries. Global growth
- Share buybacks
