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Grand Deja Vu? Techs tanked, BRK surged


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The Grand Deja Vu ?

 

Is the 9th June 2017 the overture for a grand deja vu of 1st Feb 2000? The 1st Feb 2000 was the day when BRK A hits a low of US$ 44.000. (The old B share was at that day US$ 1466). The same day the tech stocks hit record highs and than they start to burst in the mighty bang.

 

I remember a quote of someone, he said or wrote: "in the same second when the prices of the techs got red in my computer, BRK price got green..."

 

1st Feb 2000 our beloved Berkshire founds track immediatly, one day later the rocket started and in the same way the techstocks melted down, we saw a mighty Berkshire lift of. One year later, on 1st Feb 2001, BRK reached US$ 70.300. The Techs were defeated.

 

On 9th June 2017 we saw the same direction, also on one singel day: Belaughed Techs like FANG etc. tanked and beloved BRK started to rise. Will it go on ? 17 years later, will Mr. Market double down?

 

We are fully ammunitioned with 100B, let the elephants come to us. If Warren will hunt an elephant, with a profit of 20 B per year, BRK should minimum double again.

 

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The Grand Deja Vu ?

 

Is the 9th June 2017 the overture for a grand deja vu of 1st Feb 2000? The 1st Feb 2000 was the day when BRK A hits a low of US$ 44.000. (The old B share was at that day US$ 1466). The same day the tech stocks hit record highs and than they start to burst in the mighty bang.

 

I remember a quote of someone, he said or wrote: "in the same second when the prices of the techs got red in his computer, BRK price got green..."

 

Our beloved Berkshire founds track immediatly, one day later the rocket started and in the same way the techstocks melted down, we saw a mighty Berkshire lift of. One year later, on 1st Feb 2001, BRK reached US$ 70.300. The Techs were defeated.

 

On 9th June 2017 we saw the same direction on one singel day: Belaughed Techs like FANG etc. tanked and beloved BRK started to rise. Will it go on ?

 

We are fully ammunitioned with 100B, let the elephants come to us. If Warren will hunt an elephant, with a profit of 20 B per year, BRK should minimum double again.

 

I think it is insane to compare FANG to tech stocks in 2000. Facebook and Google are printing money, any industry Amazon goes in, companies panic. Look forward long term, I believe high tech companies are actually cheaper than BRK. Time will tell.

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The Grand Deja Vu ?

 

Is the 9th June 2017 the overture for a grand deja vu of 1st Feb 2000? The 1st Feb 2000 was the day when BRK A hits a low of US$ 44.000. (The old B share was at that day US$ 1466). The same day the tech stocks hit record highs and than they start to burst in the mighty bang.

 

I remember a quote of someone, he said or wrote: "in the same second when the prices of the techs got red in his computer, BRK price got green..."

 

Our beloved Berkshire founds track immediatly, one day later the rocket started and in the same way the techstocks melted down, we saw a mighty Berkshire lift of. One year later, on 1st Feb 2001, BRK reached US$ 70.300. The Techs were defeated.

 

On 9th June 2017 we saw the same direction on one singel day: Belaughed Techs like FANG etc. tanked and beloved BRK started to rise. Will it go on ?

 

We are fully ammunitioned with 100B, let the elephants come to us. If Warren will hunt an elephant, with a profit of 20 B per year, BRK should minimum double again.

 

I think it is insane to compare FANG to tech stocks in 2000. Facebook and Google are printing money, any industry Amazon goes in, companies panic. Look forward long term, I believe high tech companies are actually cheaper than BRK. Time will tell.

 

MSFT, CSCO, INTC, ORCL were all printing money in 2000, though they weren't such great investments.

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The Grand Deja Vu ?

 

Is the 9th June 2017 the overture for a grand deja vu of 1st Feb 2000? The 1st Feb 2000 was the day when BRK A hits a low of US$ 44.000. (The old B share was at that day US$ 1466). The same day the tech stocks hit record highs and than they start to burst in the mighty bang.

 

I remember a quote of someone, he said or wrote: "in the same second when the prices of the techs got red in his computer, BRK price got green..."

 

Our beloved Berkshire founds track immediatly, one day later the rocket started and in the same way the techstocks melted down, we saw a mighty Berkshire lift of. One year later, on 1st Feb 2001, BRK reached US$ 70.300. The Techs were defeated.

 

On 9th June 2017 we saw the same direction on one singel day: Belaughed Techs like FANG etc. tanked and beloved BRK started to rise. Will it go on ?

 

We are fully ammunitioned with 100B, let the elephants come to us. If Warren will hunt an elephant, with a profit of 20 B per year, BRK should minimum double again.

 

I think it is insane to compare FANG to tech stocks in 2000. Facebook and Google are printing money, any industry Amazon goes in, companies panic. Look forward long term, I believe high tech companies are actually cheaper than BRK. Time will tell.

 

MSFT, CSCO, INTC, ORCL were all printing money in 2000, though they weren't such great investments.

 

To say tech is a bubble, we need to estimate their value first. Take Google as an example, market cap is $665 Billion today. Q1 2017 Free cash flow was $7Billion (a quarter), revenue was growing about 22-24% per year. So how much it is overvalued?

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Guest 50centdollars

The nifty fifty stocks in the 70's were some of the best companies in the world. They all printed money too.

 

In 1972, Disney traded at a P/E of 82, JNJ traded at 62, KO at 48 and GE at 26. Once the bear market started in 1973, these P/E multiples collapsed.

 

By 1982 the P/E's were the following: DIS 20.7 ( -75%) , JNJ 17.8 (-71%), KO 13.4 (-72%), GE 12 (-55%).

 

Lets take a look at their earnings.

 

            1972                 1982

Dis        $0.03              $0.06          +100%

JNJ        $0.04              $0.17          +297%

KO        $0.06              $0.16            +149%

GE        $0.06              $0.17          +187%

 

So even though earnings continued to increase over the next 10 years, their P/E's collapsed and never returned to those multiples.

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50centdollars, great post, THX!

 

Now BRK is trading P/E 19 to 20, but the potential future P/E is a max of 8 to 10 (if 100 to 150 B acquisition can be realized) Cashflowratios more attractiv: BRK Marketcap is 419 B, Cashflow in 2017 app 35 B. 100 B on hands for doubleling profit and cashflow.

 

Maybe we are on the eve, Warren will pull the historical 150 B trigger. Berkshire will be the Phoenix of Wall Street! Our old eagle will fly proudly round the highest summit cross.

Latest on Warrens 90th anniversary, Mr Market shall deliver the BIG T (1 Trillion) as our all gift.

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The nifty fifty stocks in the 70's were some of the best companies in the world. They all printed money too.

 

In 1972, Disney traded at a P/E of 82, JNJ traded at 62, KO at 48 and GE at 26. Once the bear market started in 1973, these P/E multiples collapsed.

 

By 1982 the P/E's were the following: DIS 20.7 ( -75%) , JNJ 17.8 (-71%), KO 13.4 (-72%), GE 12 (-55%).

 

Lets take a look at their earnings.

 

            1972                 1982

Dis        $0.03              $0.06          +100%

JNJ        $0.04              $0.17          +297%

KO        $0.06              $0.16            +149%

GE        $0.06              $0.17          +187%

 

So even though earnings continued to increase over the next 10 years, their P/E's collapsed and never returned to those multiples.

 

I thought I read somewhere that if you had held most of the nifty fifty even at their peak multiples until today you still would have beat the S&P. Not sure where I read this (or if it's even true), but just something to consider.

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Is 35B free cash flow, or operating cash flow?

If the later it's not that impressive against the marketcap 419B

 

50centdollars, great post, THX!

 

Now BRK is trading P/E 19 to 20, but the potential future P/E is a max of 8 to 10 (if 100 to 150 B acquisition can be realized) Cashflowratios more attractiv: BRK Marketcap is 419 B, Cashflow in 2017 app 35 B. 100 B on hands for doubleling profit and cashflow.

 

Maybe we are on the eve, Warren will pull the historical 150 B trigger. Berkshire will be the Phoenix of Wall Street! Our old eagle will fly proudly round the highest summit cross.

Latest on Warrens 90th anniversary, Mr Market shall deliver the BIG T (1 Trillion) as our all gift.

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Guest 50centdollars

The nifty fifty stocks in the 70's were some of the best companies in the world. They all printed money too.

 

In 1972, Disney traded at a P/E of 82, JNJ traded at 62, KO at 48 and GE at 26. Once the bear market started in 1973, these P/E multiples collapsed.

 

By 1982 the P/E's were the following: DIS 20.7 ( -75%) , JNJ 17.8 (-71%), KO 13.4 (-72%), GE 12 (-55%).

 

Lets take a look at their earnings.

 

            1972                 1982

Dis        $0.03              $0.06          +100%

JNJ        $0.04              $0.17          +297%

KO        $0.06              $0.16            +149%

GE        $0.06              $0.17          +187%

 

So even though earnings continued to increase over the next 10 years, their P/E's collapsed and never returned to those multiples.

 

I thought I read somewhere that if you had held most of the nifty fifty even at their peak multiples until today you still would have beat the S&P. Not sure where I read this (or if it's even true), but just something to consider.

 

Oh ya but who held on? If you held the stocks I listed above to today you're a millionaire or even a billionaire depending on how much you bought. In 1972, DIS was trading at $2.20 and by 1982 it was $1.32. If you bought in 1972 at the top, it was still a terrible investment for the next 10 years. If you held to today, yeah you made a killing but how many people held? I would guess very few. My point is that price matters.

 

Like Howard Marks says, "you can buy the best companies in the world and lose money and you can buy the worst companies in the world and make money."

 

Just out of curiosity, does anyone know a company in the history of the world that has justified a P/E of over 100?

 

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The nifty fifty stocks in the 70's were some of the best companies in the world. They all printed money too.

 

In 1972, Disney traded at a P/E of 82, JNJ traded at 62, KO at 48 and GE at 26. Once the bear market started in 1973, these P/E multiples collapsed.

 

By 1982 the P/E's were the following: DIS 20.7 ( -75%) , JNJ 17.8 (-71%), KO 13.4 (-72%), GE 12 (-55%).

 

Lets take a look at their earnings.

 

            1972                 1982

Dis        $0.03              $0.06          +100%

JNJ        $0.04              $0.17          +297%

KO        $0.06              $0.16            +149%

GE        $0.06              $0.17          +187%

 

So even though earnings continued to increase over the next 10 years, their P/E's collapsed and never returned to those multiples.

 

I thought I read somewhere that if you had held most of the nifty fifty even at their peak multiples until today you still would have beat the S&P. Not sure where I read this (or if it's even true), but just something to consider.

 

Oh ya but who held on? If you held the stocks I listed above to today you're a millionaire or even a billionaire depending on how much you bought. In 1972, DIS was trading at $2.20 and by 1982 it was $1.32. If you bought in 1972 at the top, it was still a terrible investment for the next 10 years. If you held to today, yeah you made a killing but how many people held? I would guess very few. My point is that price matters.

 

Like Howard Marks says, "you can buy the best companies in the world and lose money and you can buy the worst companies in the world and make money."

 

Just out of curiosity, does anyone know a company in the history of the world that has justified a P/E of over 100?

 

When Google went public in 2004, it was around P/E 100. From there, it went up 1800%.

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Guest longinvestor

The nifty fifty stocks in the 70's were some of the best companies in the world. They all printed money too.

 

In 1972, Disney traded at a P/E of 82, JNJ traded at 62, KO at 48 and GE at 26. Once the bear market started in 1973, these P/E multiples collapsed.

 

By 1982 the P/E's were the following: DIS 20.7 ( -75%) , JNJ 17.8 (-71%), KO 13.4 (-72%), GE 12 (-55%).

 

Lets take a look at their earnings.

 

            1972                 1982

Dis        $0.03              $0.06          +100%

JNJ        $0.04              $0.17          +297%

KO        $0.06              $0.16            +149%

GE        $0.06              $0.17          +187%

 

So even though earnings continued to increase over the next 10 years, their P/E's collapsed and never returned to those multiples.

 

I thought I read somewhere that if you had held most of the nifty fifty even at their peak multiples until today you still would have beat the S&P. Not sure where I read this (or if it's even true), but just something to consider.

 

Oh ya but who held on? If you held the stocks I listed above to today you're a millionaire or even a billionaire depending on how much you bought. In 1972, DIS was trading at $2.20 and by 1982 it was $1.32. If you bought in 1972 at the top, it was still a terrible investment for the next 10 years. If you held to today, yeah you made a killing but how many people held? I would guess very few. My point is that price matters.

 

Like Howard Marks says, "you can buy the best companies in the world and lose money and you can buy the worst companies in the world and make money."

 

Just out of curiosity, does anyone know a company in the history of the world that has justified a P/E of over 100?

 

The history of the world ended already with FANG. And there's more, TSLA, Uber etc. They have won and are about to take it all. They are coming after my money also.

The future ain't what it used to be. Yogi Berra

 

 

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The history of the world ended already with FANG. And there's more, TSLA, Uber etc. They have won and are about to take it all. They are coming after my money also.

The future ain't what it used to be. Yogi Berra

 

It's actually good with some humor on the board at these market levels! : - )

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Oh ya but who held on? If you held the stocks I listed above to today you're a millionaire or even a billionaire depending on how much you bought. In 1972, DIS was trading at $2.20 and by 1982 it was $1.32. If you bought in 1972 at the top, it was still a terrible investment for the next 10 years. If you held to today, yeah you made a killing but how many people held? I would guess very few. My point is that price matters.

 

 

It's not just "who held on", it's "who lived long enough to take advantage".  Even if the Nifty 50 outperformed from 1972 to today, give or take half the people who were alive in 1972 are dead today and haven't been able to spend the windfall.  Long term investing has its limits.

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Good point Petec. It remains useful to look at P/E as a crude indicator of the number of years it takes to get your investment back. Of course, high growth makes it more complex and could make justify almost anything but, it is always after a correction that all of a sudden, the growth trajectory tends to be revised downwards.

 

I mentioned before that the only stock from 1999-2000 that has measurably surpassed its high of that era is Amazon. Most other stocks are still below and a few such as MSFT slightly above. And the other 3 from the FANG did not exist at the time. So I find it amusing that investors today consider the FANG's as can't miss stocks despite their valuation, market caps and all operating in a cyclical business: advertising, retail, entertainment.

 

Cardboard

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So CoBF devolved into a forum of FANG-hate and backslapping based on 2 days of market behavior.

 

 

Can the last serious investor turn off the light please?

 

I do not understand why CoBF board hate technology stocks. Warren owns IBM and Apple too! Every annual meeting he's been talking about Amazon and Google. :-)

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The mentioned quote above "So CoBF developed..." is not from me.

 

IBM: is a great company, I am invested in IBM as well, last 2 trading days their pricedevelopment was not like the expansive Techs. IBM is cheap.

 

Apple: I like that BRK is in Apple, good company, maybe cheap now (?) I am not into that subject.

 

John, I opened the post on Friday 9th June 2017, because I see strong parallels to 1st Feb 2000 and the time after. Time will tell, if I am correct ... Please read my first post from 9th June, thats what i like to talk about. No hate against FANG...  ;D but these shares are to expansive to my mind.

 

 

 

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