Stop listening to anything else other than your own. Just read the 10Q. After cutting the fat, its about 8-10 pages, every 3 months. Lets say you follow 20 companies. That about the size of one book every three months. Not an entertaining read, but definitely enriching one.
The 10-q is there in the SEC website[1]. The summery is a quick read[2]. Just read it like you would read a textbook. Read the same for APPL, GOOG, AMZN. Do the same for two other sectors. In total about 20 companies. Very quickly you see the patterns emerge.
In the context META, here is a quick summary
Besides the sequential increases of MAU, DAU, DAP, MAP, One thing that stands out to me is:
"We anticipate our full-year 2024 capital expenditures will be in the range of $30-35 billion, with growth driven by
investments in servers, including both non-artificial intelligence (AI) and AI hardware, and data centers as we ramp up
construction on sites with the new data center architecture we announced late last year."
Thats a lot of investment mostly in NVDA hardware. Expect NVDA to rise. This also means good for other suppliers, AMD, INTC, TSMC. The benefit for META will be apparent in a few quarters.
Thank you for this info and including links. Looking through the full 10Q[1] I don't see the summary[2] or link to it. How do you go about finding summaries for other 10Qs from other companies? I was trying to work backwards to find the summary from the full 10Q so I could do the same for other companies.
Jim Cramer recommended getting in on Meta around 220 IIRC and then it dropped over 50% and he cried because on his recommendation people lost half their investment.
> He'd be up huge if he held, but he 'paper handed'. Is he a dumb guy
ive come to believe its often a matter of solvency, theres only so long you can keep that money invested before people start wanting/needing it back. Especially with large economic shifts that weve been seeing.
I don’t think solvency was an issue here but another way of getting to the same place is that he felt he could deploy the capital more effectively elsewhere. He made a bet on Netflix because he thought he had some alpha. After he lost a third of it he had less faith in his original thesis and thus his allocation priorities changed.
Just for context Ackman’s 1.1B purchase would be worth about 2.25B today if he hadn’t sold it for 700M
Of course that doesn’t mean it was a dumb trade but his rationale in the letter doesn’t make a lot of sense to me. It has the vibe of something you would come up with if you needed to sound smart justifying a decision you had already made emotionally
> Jim Cramer recommended getting in on Meta around 220 IIRC and then it dropped over 50% and he cried because on his recommendation people lost half their investment.
Wait, someone actually traded on Cramer's advice? Please tell me this is a joke.
TBH I'm not 100% sure what lesson to take from this. If in 2022, you thought that a) DAU across the entire family of apps was as high as it ever was going to be and b) that the broader economy was about to enter a recession, causing marketing spend to plummet, is a P/E of 9 still a bargain? Isn't that supposed to reflect potential for future growth, and if all the eggs were in the metaverse basket...
Large cap stocks that have firmly exited the growth phase generally have a p/e of around 15. As long as you dont think profits will decrease a p/e of 9 is generally a hard buy.
Note that Intel had a P/E of about 9 as of March 2021 - I remember because I bought it. Three years later, with the stock having gone down by ~8%, its P/E is now 108. Oftentimes when investors discount a stock relative to earnings, it's because they expect earnings will decrease.
Well anybody will get wrong assumption on FB if he doesn't see the impact FB is having outside USA, especially in developing countries. it's the only game in town, a complete social package. Tiktok is another but it competes in one specific side.
At the time Meta had greater profits than even Walmart, thanks to very high profit margins. It was insanely cheap. The market was pricing in a disaster in which Metaverse losses somehow destroy the company, or loss of market share to TikTok. Neither of those happened.
I think meta's dip was always much more about Mark being unimpeachable than anything else. The market new $10 billion a year for the metaverse was a drop in the bucket, I think everyone was reasonably confident that meta would have a tiktok competitor. The issue was that investors thought Mark making "bad" decisions now meant he would continue to. Instead he instituted massive layoffs to show investors that he is thinking of them, so the stock went back up.
I think meta's biggest non mark issue was the apple tracking stuff that cost them billions of dollars.
Is that the lesson? There's a ton of sky-is-falling commentary/editorials on Seeking Alpha, YouTube, et. al. It's absolutely impossible to see fact from feeling.
Maybe it's time to start analyzing 10qs, I'm telling myself.
Sophisticated money is generally not. The average retail investor absolutely is. Most retail investors invest based on emotion not on fact. A lot of tech company employees justify their emotions as providing them an edge because they're in the industry, but they often likewise get hung up on factors that they find emotionally relevant but aren't actually market relevant factors.
Look at this other comment https://news.ycombinator.com/item?id=39222007 in this thread. A lot of it is just idle speculation based on the commenter's personal values. These are the analyses that drive retail investors to invest. I don't mean to pick on this commenter specifically; I just felt it to be very illustrative of the kind of analysis that the average tech person does to justify or not justify an investment.
Investing is about reading the facts, not the tea leaves. Sometimes the facts aren't enough to predict the future. See Bill Ackman trying to catch Netflix falling and exiting at a loss soon after: https://variety.com/2022/digital/news/bill-ackman-sells-netf...
Had a decade ago you bought and held the FAMNG index of companies, you would have beat pretty much every hedge fund and active manager, save for Renaissance Technologies....
I’m a fan of Intel turning it around, becoming a fab, etc. However, I would seek a lot of input on this one. It requires a lot of capital and could take a while.
For now it's just promises from a failing giant, no?
What makes you think they will suddenly be able to innovate after decade long stagnation and being beaten by AMD and NVidia? It's not like you can change company culture with simple "but now we will try". Firing most of the management and substituting them with engineers would be a first step. Until then they will fall even further behind imo.
In Oct 2022, I was jumping up and down saying “the P/E is 9!” People just hating on Zuckerberg.
https://news.ycombinator.com/item?id=33366322