Damodaran: Older Tech Companies Among The More Reasonable Stocks Right Now

0
Damodaran: Older Tech Companies Among The More Reasonable Stocks Right Now

Aswath Damodaran, NYU Stern School of Business professor of finance, discusses the sell-off in the markets and where he sees valuations for tech stocks and says they are among the more reasonable stocks now.

H/T Dataroma

Mohnish Pabrai On Value Investing, Missed Opportunities and Autobiographies

Mohnish PabraiIn August, Mohnish Pabrai took part in Brown University's Value Investing Speaker Series, answering a series of questions from students. Q3 2021 hedge fund letters, conferences and more One of the topics he covered was the issue of finding cheap equities, a process the value investor has plenty of experience with. Cheap Stocks In the Read More

Get Our Activist Investing Case Study!

Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below!

Q3 hedge fund letters, conference, scoops etc

Older tech companies among the more reasonable stocks right now, says NYU Stern's Damodaran

Transcript

I think collectively tech stocks have not done much worse than the rest of the market especially in the last two weeks. I think it's. I think part of the reason I think we overreact to detect movements in some of these tech stocks that trading at such high prices. That when you see the absolute drop in price it looks awful. I mean a 100 point drop in the stock price when you're trading at two thousand dollars a hundred dollars stock price drop is four percent four and a half percent five percent. So I think part of it is I think we're overreacting to changes. The other is I think that that if you look at the tech sector it's it's very divergent the old tech companies actually are among the more reasonable stocks in the market right now. You look at the the Microsoft the apple. I would buy them. The younger tech companies I think are being corrected and I think legitimately so because I think they had such a great run up that was just a matter of time before they correct.

We have on our screen here I don't like the Netflix business model Netflix we all know has come off of the highs of the summer a big bond offering announced this week what don't you like. I

think they're on a on a in a cycle that they can get out of it. What I see. They borrow money they make more movie and more original content they get more subscribers they go to the market to try to push up the market price and then use that to go borrow more money. And. I don't see a way to get off this get out of this cycle. I mean it's not as if they can slow down the production of content once said subscribers hit a cap because it training their subscribers almost expect 20 25 new shows every year. And that's not sustainable. So there's something about this model that that bothers me it just doesn't sound and it doesn't look to me like a sound business model that can scale up these.

Updated on

Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
Previous article The Intelligent Investor – Chapter 20 Margin Of Safety Summary
Next article Facebook Finally Introduces Dark Mode On Messenger

No posts to display