For example, when Meta P/E was 9, people should have said to themselves “hey, that’s an incredible opportunity”, rather than waste all that time hating on the company.
Crypto could recover if enough people “believe“ but there’s no real business
If you want to buy META as a bet on Zuck himself or the success of their conception of the metaverse, that’s one thing, but I don’t see how this is a reasonable value investment based on their current management and capital structure.
* I know Meta has done stock buy-backs from time to time, which are of course economically equivalent to a dividend (except more tax efficient), but from eyeballing their history of repurchases, it looks like they, like many issuers, managed to set billions of dollars of shareholder money on fire by repurchasing the stock while it was trading at rich multiples.
The reason meta is uninvestible is because they are a clear cut case of structurely unsound corporate governance.
We don’t need to convince each other. The market will tell us who is right.
Is there something special about the number 9?
Wondering why you waited to buy at 9 but 10 was no good.
https://www.bbc.com/news/business-63406803.amp
The stock did continue lower and I certainly didn’t get the bottom.
All I’m saying is take the emotion out of it and try to be open minded. Hating on a company has little value. At P/E of 9 there’s a safer margin
Also, I didn’t say Buffett would buy META. He’s not really a tech investor.
It doesn't sound like you did that, though. You responded to a drop in share price rather than fundamentals.
As you just said, it really had less to do with the number 9 and more to do with the number 20.
But if you thought Meta was a good investment at PE 10 or higher, I'm not sure why you wouldn't have already owned it.
Now that the PE is back above 10, does that mean you're selling it?
However, this is not a Buffett view on things, as he evaluates based on intrinsic value rather than P/E. He also avoids tech companies because it's hard to figure out what their intrinsic value is. KO (Coca-Cola) for example, is going to grow about as much as GDP, it has a long history of 30% net profit, it has a huge moat so the dynamics of the company aren't likely to change. Thus one can actually attempt to evaluate its intrinsic value: what would you pay for a bond that earned 30% every year? Do the present value calculation and there you go. But what is META's prospects 10, 20, 30 years from now? Hard to say, and the social media landscape keeps changing. So Buffett would not invest in META--a P/E of 9 might be a steal, but it might also be an indication that the prospects of the company are no longer so positive as they were two years ago.
(AAPL is a notable exception to Buffett not investing in tech, because of how their products reinforce each other to create a large moat. At this point I think it is also fairly likely that Apple will be around making computers for the foreseeable future--even OS 9 didn't kill them off, and now they have market leading hardware and a solid OS and compelling ecosystem. In this way of thinking, one could argue they have similar dynamics as KO, but with the advantage that they have growth prospects. They also are returning 30% to shareholders, mostly in the form of huge stock buybacks. Hence Buffett has been a massive buyer of AAPL recently.)
This is the key point right here.
Just looking at stats alone isn't enough to know that you're seeing "an incredible opportunity".
AFAIK, Meta doesn't pay dividends. So Buffet (or Gates, who is Buffet but likes tech) would steer clear.
Buffett doesn’t buy companies because of dividends. In fact, he’s not a fan of them.
https://www.investopedia.com/ask/answers/021615/why-doesnt-b...
If you remain convinced facebook is a utility, good job to someone.