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About the Author: Richard Money

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  1. Hi Carlin , I regularly watch your videos. My question is I bought one of the paint sector company at pe around 50, 1 year back. Now stock has given me 30% profit. But PE is expanded to 75 . Company is good but PE looks very high . Sales is 10% yoy and ROE is of 20 to 23% from many years. I think It will do 20% ROE for another few more years. Please guide what should I do. Hold it even if the PE goes above 80 or sell it and wait for it to come down with price .

    1. Sell when the reason for owning the company is not there anymore for you, or when it is extremely overpriced to what you think is the underlying value, for example by determining its combined future cash flows and their probabilities. I do not know your company but such high PE values are often only realistic if you think that the company will grow its earnings enormously in the future. Use the free excel of Sven to calculate the DCF and what earnings explosion that would need. It could be that it is a fair price though. Get an in depth understanding of the company, so you could almost write a masters thesis on the company.

  2. New week, another 2 days when JD gapped down 2% for no reason: it is now breaking under the covid lows, routinely sinking 3-5%.

    In 2017, JD was trading in the 35-45 range; operating margin on JD retail was 1.4%.
    JD Retail revenue has almost tripled to 930b RMB since then and operating margins have increased steadily from FY17 to FY23: 1.4%, 1.6%, 2.5%, 3.0%, 3.1%, 3.7%, 3.9%.
    JD Logistics brings another 155b RMB in revenue and is on the verge of profitability.
    The company also paid 35% of its FY22 Retail operating income as a dividend this year.
    Assuming that they can sustain a 3.5% profit margin on JD Retail and that JD Logistics continues to break even, fixing a terminal multiple of 15, a discount rate of 10% and a continued 30% dividend distribution, the intrinsic value for revenue growth 7/10/12% is $40/52/61.
    Not including their net cash position (~$17/share).
    Not including the possibility that JD Logistics profit margins expand.

    1. The rule for Chinese stocks is they always return 0% or less over the long term. China’s GDP is up 10x over the last 20 years, while their stock market is up 0% during that time.

    2. @N0obusMaximus I don’t hold long term.
      There have been times during the past 10 years when they were undervalued and one should have accumulated.
      And there have been times when the valuations were stretched and one should have trimmed.
      Now we are deeply in the former.

    3. I’m puzzled about JD shares too… i got a small position and it keeps being beaten down likes there’s no tomorrow… there’s must be something i’m missing…

    1. VDTA is longer term treasuries so more susceptible to rate increases (which would make the value of the bonds go down). I’d guess corporate bonds have similar issues but I don’t know them well, meaning you may not get all of your money back when you need it, in exchange for a higher yield that is.

      I would park my money in something shorter term if you need it in the next few months, like SGOV (has lower MER) or TBIL which are both 1-3 month treasuries ETF. They’ll get you to keep the initial value much better and give you over 5% yield with the current rates. Or just get T-bills yourself but then you have to do the buying and laddering yourself instead of having the ETF do it for you.

    2. @Cheesum but…i want the interest risk exposure…i want the whole usd treasuries accumulating for some years and cash out if and when interest rates are cut in 3-5 years. Does that make sense?

  3. Hi Sven . I have a very unique question for you . I am living in a third world country, where economy is very poor, political situation is also not good , inflation rate is almost 30% and interest rate is 22%. But there are some good bussiness and there are billion dollar companies as well . I want you to imagine yourself in this situation and tell me that what will be your approach or investing strategy as a value investor.
    At the end I want to appreciate you for your work , for me you are my university. Please keep doing your work here on YouTube because it means a lot to me, as i cannot afford your research platform. Thanks for adding value in my life .

  4. The stock market rally still appears to be in the midst of a normal pullback. I just sold my home in the Boca Grande area and I’m looking to remunerate a lump sum into the stock market before stocks rebound, is this a good time to buy or no?

    1. Find stocks with market-beating yields and shares that at least keep pace with the market long term. For a successful long-term strategy you have to seek guidance from a broker or financial advisor.

    2. @Andrea llln I agree, I was on the sideline for awhile observing, trying to figure out the best time to get in, that was before I came by a coach, commended by a pundit on Reddit, reluctant at first but I went ahead and got in touch with the coach, long story short, it’s been 3years and counting and I’ve made over 1.5million dollars simply by following her guidance. I took a vacation to Bahamas this summer just to reward myself a little for the consistency lol

  5. What do you think about owning Gold Sven? Generally i hate 0% yielding asset.. I don’t know if this time is different… USA debt is out of control, 5,5% short term is ok, but i woudn’t touch the 10Year at 4,3%

  6. 5% savings, money markets and CD’s means banks need deposits, BAD!!!!!!!!!! Stagflation/Disinflation is starting to hurt the banks.

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