I mean, nobody knows anything, but hard to imagine you look stupid selling when it hits “biggest market cap in the world.”
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If you’re going to continue to make donations in the future, just donate it all now (you can use a DAF) if you want. Donations of appreciated securities are the sickest tax loophole you can enjoy without dying.
This is a remarkably uninteresting video, but it was the first time I think I’ve ever seen Benjamin Graham (Warren Buffett mentor, author of “The Intelligent Investor”) on video.
Also, lol at my students ever being as engaged or well dressed as this group.
Yeah, when I said I donated it, I transferred the most appreciated lots into my DAF. That was kind of a pain to ensure that it was done correctly. I plan to do that every year. The amount I put in my DAF varies from year to year depending on how things are going.
Yeah, at this point I’m just being greedy. I’m sure I will painfully learn my lesson one way or another.
Interesting from Chris Bloomstran:
Stunning. Nvidia passes Microsoft and Apple as largest market cap. Combined, the three are valued at $9.9 trillion, 21.5% of the entire market capitalization of the S&P 500. The three are today LARGER than the capitalization of the ENTIRE S&P in September 2011, not a market low.
Including Google, Amazon, Meta and Tesla, the Magnificent 7 have a $16 trillion combined market value, 34% of the S&P 500 and LARGER than the ENTIRE S&P as recently as February 2016, just over 8 years ago and most definitely nowhere near a market bottom.
Nvidia is valued at 42x and 78x trailing sales and earnings on an unsustainable 54% net profit margin.
Microsoft is valued at 14x trailing sales and 39x earnings on a 36.4% net margin.
Apple is valued at 8.6x and 33x trailing sales and earnings on a record 26.3% net margin.
These are crazy valuations for very large companies that can grow sales and earnings nowhere near as rapidly as they did over the past one and two decades. Microsoft and Apple traded for less than 10x earnings at various points over the past 20 years.
This is the goofiest and likely most dangerous concentration of overvaluation I’ve seen in 34 years investing and throughout financial history. The extremes extend beyond the three and seven to companies like fellow Nasdaq 100 member Costco, now with a $386 billion market cap on $254 billion in sales. Costco has a 2.8% profit margin, up from 1.7% when I first bought the stock. With $7.1 billon in earnings, the P/E multiple is an incredible 54x. How do you make money with an initial 1.8% earnings yield, 2.5% growth in systemwide square footage (down from 7.5% growth 20 years ago), double inflation same-store sales growth and modest potential to increase margins? You are looking at seven to eight years of no change in the share price for the stock to trade at 25x earnings.
Mr. Market is very good at rewarding business success but to a fault. In the short term, stocks can trade at extremes relative to fundamentals, both on the low side and the HIGH side. At 23x 2024 expected earnings, the market-cap weighted S&P 500 is froth with excess and in my judgment uninvestable. Under the hood, the majority of stocks are not overvalued. The bifurcation between the dear and the cheap reminds me of March 2000. From that point the index has returned 7% per year, spending much of the subsequent decade in the red. You can have extremes of over or undervaluation in the short and even intermediate terms. But in the long run, Mr. Market gets it right.
Feel like an important caveat is that I don’t know much about Bloomstran. He seems to write thoughtful and detailed commentaries, but I’m pretty sure that’s motivated reasoning on my part because he always ends up with a conclusion that appeals to me: Berkshire Hathaway is cheap.
Not fully explanatory, but I do think there is something to large corporations totally owning the political and regulatory process in this country. Like sure, they may occasionally pay some fines or whatever, but there is no threat to their ongoing dominance.
Pfft. Send that dude the title of this thread.
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Isn’t he the guy who was always dunking on Chamath?
Also happen to own a nice chunk of Costco. I guess I need to sell that too.
Yup, so you can imagine how much I’m inclined to agree with him about most anything.
Costco - the stock that’s been too expensive for the last 20 years.
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Well MSFT, Apple, Google and the like have to operate in EU and deal with their regulations as well. They’re not just valued based on their US business
when nancy pelosi sells.
that said, that train ain’t slowing down any time soon.
Nividia added over a trillion dollars in market cap in 21 trading days. Just how unprecedented that is I think is truly underappreciated.
I know this is a large sum of money but it’s really hard to grasp what a trillion dollars is. And it’s even harder to internalize that one company gained that much value in such a short amount of time.
What’s even more confounding to me is that the sequential rate of growth over the last 4 quarters is declining very fast. The year over year growth looks impressive but that really shouldn’t matter to a stock like Nvidia. It’s not a retailer like Amazon or Apple with seasonal trends. They sell the AI shovels to the largest companies and once those companies have what they need growth will turn into contraction.
21 days, 4 weeks 1 trillion dollars!!
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I dunno, I think adding a DHL, Ford, or DoorDash worth of value every day is 100% sustainable.
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For conparison, from the all the way back in 2018:
Really does feel a little like late 90s vibes in the tech market
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Apple’s trillion dollar market cap was the first thing that came to mind when trying to grasp the value of trillion dollar. It basically took Apple 40 years to get there call it 25 when adjusting for inflation. And Nvidia did it in less then a month. Combine that with a CEO pay package valued at 50 billion and I think capitalism is in doing the death rattle.
Unfortunately do to inflation I can’t afford my own pitch fork but if someone has an extra one I can borrow count me in!
Same
Much like your idol, I feel like my favorite holding period is forever. It is my default and has served me well. Never even considered selling NVDA before the last year, because I almost never sell stonks. Gonna probably hold Costco. NVDA is another matter, though.
Fake valuations, but real political power, means there is no imminent death here.