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What are you buying today?


LowIQinvestor

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Added a few more BRK. If the current tech reversal trend continues(big week with GOOG and FB ER coming up; two of the most susceptible techies), I think this is a good place to be. Or maybe its just a 1-2 days market head fake to screw with people who like value stocks....probably.

 

EDIT: just grabbed some INTC a bit below $50 as well.

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More INTC (my AH buy yesterday was clearly not a great idea) and a bit more CBOE.

 

Are you just being sarcastic? Rarely does the fundamental investment case go from investable to not a great idea in 24 hours or with a few buck s/t move. Or are you just looking for a quick flip here? Bought a small bit this morning, not super exciting, but basically at mid March levels now.

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More INTC (my AH buy yesterday was clearly not a great idea) and a bit more CBOE.

 

Are you just being sarcastic? Rarely does the fundamental investment case go from investable to not a great idea in 24 hours or with a few buck s/t move. Or are you just looking for a quick flip here? Bought a small bit this morning, not super exciting, but basically at mid March levels now.

 

The fundamental bet will need time to work out, but my entry was in retrospect too hastIly, as it often is good idea to wait a bit and letting the bad News And selling to dissipate a bit. In fact even today’s entry may be too early. But then again, I typically start small and adding more is pretty much part of the plan.

 

iI am typically not that keen on turnaround any more, but in this care, I think there is enough meat on the bone that I can get out flat if they keep screwing up and it should work out nicely, if they get a few things right. They are lucky they they have a lot of secular tail winds (5G, cloud, remote working, AI) that goes in their favor he gives them more time and resources to execute.

 

Worst case, they need to pivot and abandon their strategy to keep leading edge manufacturing in house, sell or spin off wafer fabs and use TSM like AMD did more than a decade ago when they couldn’t keep up.

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Cool, thanks for the explanation. Like you, I buy small, often.

 

I forget who, it may have even been Cramer or one of the CNBC talking heads who said rule of thumb should be wait 3 days from earnings to make a move, but I personally fluctuate between "the fundamentals" mattering, in which case you're being counter productive getting too crazy about entry/exits, and the "trading game" in which case its very important. Of late, the later has been a popular theme with market participants, and I've found myself being influenced a tad by the mentality, at least in terms of my accumulation approach in some instances. Not sure whether thats good, bad, or ultimately meaningless.

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Buying during after hours directly after bad news is usually not a great move. I estimate more often than not, after hours price action lags rather than leads. Particularly during sensational timeframe (eg the day of earnings release).

 

 

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Buying during after hours directly after bad news is usually not a great move. I estimate more often than not, after hours price action lags rather than leads. Particularly during sensational timeframe (eg the day of earnings release).

 

Yes, if there is a substantial change in the story (not just an earnings miss when overall numbers are still good etc.) than AH tend to lack. It figure that  funds managers don’t well AH they are going to meet in the morning and decide to sell. I think it’s faster than 3 days in many cases, but something it takes weeks to dissipate.

 

I bought a tiny bit of MSFT.

 

Bit the bullet so to speak. Time will tell if it is closer to buying PG in the middle of the century or KO in the 90s

 

I have MSFT on my watch list as well, but I don’t think I would take a bite above ~$180 (~30x earnings).

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In vino veritas.

 

Yes, I agree on some semblance of a valuation threshold. But how many times have we said and heard “ah if only”. 35 vs 30 times earnings is not going to make or break the outcome. And it wasn’t a huge purchase - like Greg said I buy often but in small quantities.

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Oh you have no idea about small but often. For some of the "corona will pass" trades, I've got a 6 month(from March) expected time frame for the shenanigans and market gyrations to play out. And subsequently a similar purchase horizon until full positions are accumulated, with the max size for any one position being about 7.5%. Lots and lots of buying! Only one exception was SPG and and MSGN. Both(SPG at $50 and MSGN at $13) I figured if $50/$13 aint good, neither will be anything below that. But a bunch of others... a million purchases.

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In vino veritas.

 

Yes, I agree on some semblance of a valuation threshold. But how many times have we said and heard “ah if only”. 35 vs 30 times earnings is not going to make or break the outcome. And it wasn’t a huge purchase - like Greg said I buy often but in small quantities.

 

Valuation doesn’t make a lot of difference when your thesis is right, but it sure makes a lot of difference when the thesis is wrong.

 

To buy a little by at least when you like the business but consider the valuation stretched, with the intent to buy more if valuation becomes more favorable is a reasonable approach. It does goes counter the currently prevailing wisdom to never average down though.

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In vino veritas.

 

Yes, I agree on some semblance of a valuation threshold. But how many times have we said and heard “ah if only”. 35 vs 30 times earnings is not going to make or break the outcome. And it wasn’t a huge purchase - like Greg said I buy often but in small quantities.

 

Valuation doesn’t make a lot of difference when your thesis is right, but it sure makes a lot of difference when the thesis is wrong.

 

To buy a little by at least when you like the business but consider the valuation stretched, with the intent to buy more if valuation becomes more favorable is a reasonable approach. It does goes counter the currently prevailing wisdom to never average down though.

It's hard for me to add to MSFT when I have a cost base around $24. I was buying around 7-8x earnings back then. 35 seems like a kings ransom.

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In vino veritas.

 

Yes, I agree on some semblance of a valuation threshold. But how many times have we said and heard “ah if only”. 35 vs 30 times earnings is not going to make or break the outcome. And it wasn’t a huge purchase - like Greg said I buy often but in small quantities.

 

Valuation doesn’t make a lot of difference when your thesis is right, but it sure makes a lot of difference when the thesis is wrong.

 

To buy a little by at least when you like the business but consider the valuation stretched, with the intent to buy more if valuation becomes more favorable is a reasonable approach. It does goes counter the currently prevailing wisdom to never average down though.

It's hard for me to add to MSFT when I have a cost base around $24. I was buying around 7-8x earnings back then. 35 seems like a kings ransom.

 

I also owned some MSFT at $24 and sold at $40. That’s deep value investing....

 

Today’s MSFT equivalent could well be INTC, if management can turn it around. You would get the rising earnings and rising multiple Goldilocks. The rising multiple was responsible for half the returns with MSFT (eyeballing this roughly).

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In vino veritas.

 

Yes, I agree on some semblance of a valuation threshold. But how many times have we said and heard “ah if only”. 35 vs 30 times earnings is not going to make or break the outcome. And it wasn’t a huge purchase - like Greg said I buy often but in small quantities.

 

Valuation doesn’t make a lot of difference when your thesis is right, but it sure makes a lot of difference when the thesis is wrong.

 

To buy a little by at least when you like the business but consider the valuation stretched, with the intent to buy more if valuation becomes more favorable is a reasonable approach. It does goes counter the currently prevailing wisdom to never average down though.

It's hard for me to add to MSFT when I have a cost base around $24. I was buying around 7-8x earnings back then. 35 seems like a kings ransom.

 

I also owned some MSFT at $24 and sold at $40. That’s deep value investing....

 

Today’s MSFT equivalent could well be INTC, if management can turn it around. You would get the rising earnings and rising multiple Goldilocks. The rising multiple was responsible for half the returns with MSFT (eyeballing this roughly).

 

I've added some INTC here. Intel has a lot going for it other than just being at the bleeding edge of Moore's law (but it should still work out a strategy of catching up there as well...).

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In vino veritas.

 

Yes, I agree on some semblance of a valuation threshold. But how many times have we said and heard “ah if only”. 35 vs 30 times earnings is not going to make or break the outcome. And it wasn’t a huge purchase - like Greg said I buy often but in small quantities.

 

Valuation doesn’t make a lot of difference when your thesis is right, but it sure makes a lot of difference when the thesis is wrong.

 

To buy a little by at least when you like the business but consider the valuation stretched, with the intent to buy more if valuation becomes more favorable is a reasonable approach. It does goes counter the currently prevailing wisdom to never average down though.

It's hard for me to add to MSFT when I have a cost base around $24. I was buying around 7-8x earnings back then. 35 seems like a kings ransom.

 

I also owned some MSFT at $24 and sold at $40. That’s deep value investing....

 

Today’s MSFT equivalent could well be INTC, if management can turn it around. You would get the rising earnings and rising multiple Goldilocks. The rising multiple was responsible for half the returns with MSFT (eyeballing this roughly).

Yea I sold a bit MSFT at 40 and some at 80. But it was a LARGE stake to begin with. It was kind of a relief valve after getting hate mail and taking grenades in the trenches for a few years on that.

 

But I don't think that the MSFT situation is similar to INTC. When I bought MSFT it was during the everything is gonna be Apple thing. For some reason nobody noticed that the company was making anything besides Windows and that MSFT was really an enterprise software company. Apple was doing well, but at MSFT windows was pretty stable like -3% and still barfing a river of cash. On the other hand Office, Windows Server and SQL Server were growing gangbusters like 20% a year and they've been doing that for a while. SQL Server was doing to Oracle what Office did to Lotus Notes and they were in full cloud mode too.

 

Intel looks pretty cheap I have to admit. But they also have some troubles which MSFT didn't really have. The business is fundamentally different as well. The switching costs are much, much higher for enterprise tech compared to chips. INTC has to constantly spend real and meaningful money on CapEx to stay on course. They also make things and have  unit costs so not as much operational leverage as software. Also due to the industry I can't see INTC booking 20% growth year after year. They're more constrained.

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