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Comment on Growth vs. value stocks in ~finance
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Comment on Growth vs. value stocks in ~finance
shadow Link ParentYes, it's very interesting! You can obviously write an entire novel about this if you wanted to do the research, but here's some quick analysis on my end of some things to consider. The S&P 500...Yes, it's very interesting! You can obviously write an entire novel about this if you wanted to do the research, but here's some quick analysis on my end of some things to consider.
The S&P 500 started crashing Feb 20. It bottomed out on Mar 23 (-34%). That's over a month of people not sure what's going on and selling for whatever reasons they had. The overall market returned back to its Feb 19 high on Aug 18.
March 6 there was a spending package passed by the US. Then another higher one on March 18. As you can see, people kept selling and selling! California issued lockdown orders on March 19. Finally, the CARES ACT was passed March 27, after being introduced earlier.Amazon stock also started crashing Feb 20. It bottomed out on Mar 12 (-23%), and returned to it Feb 19 high on April 13.
Definitely slid less and recovered much faster than the overall market. It's entirely possible supply chain concerns fed into that decline! That and just wondering if people would have jobs and have money to actually buy anything! I've not done the total research. Remember too, people were panic selling all over, even if, as you can see, some people realized quicker than others that Amazon stock would most likely be just fine. Those people stayed calm in the face of fear and trusted their research/knowledge.There was downward pressure on Amazon stock because of the overall economy concerns, supply chains, having people being able to work in warehouses/delivery and all that.
There was upward pressure due to MASSIVE global stimulus and realization that lockdowns were going to spread, but people were going to have money to spend and need to spend it somewhere! However, that upward pressure took time to develop as you noticed.
Eventually, the demand outstripped the supply and the stock started going up!So yes, a little mix of growth/value type stock in the beginning, but I would categorize it as much more growth than value overall. People were expecting outsized revenue growth for Amazon. Amazon reported 2019Q4 earnings on Jan 30, 2020. Then reported 2020Q1 (Jan-Mar) earnings on Apr 30, which was decent, but at least not a total loss. Then finally reported 2020Q2 earnings on July 30. That Q2 earnings was massive, and continued to be massive for quite a while.
We didn't have the exact information for Amazon's earnings by the time the stock turned around. People expected Amazon to do extremely well during COVID and lockdowns, and they did. Same with Zoom and others. Zoom took a while because people didn't know just exactly how well it would do. But then Microsoft came in to crap on Zoom's bed.However, back to Amazon. It's possible somebody panic sold at the top and bought back in a month later knowing that Amazon stock would go back up up up! That's called luck. Seriously.
Timing the market and is basically impossible to depend upon. So don't try it!
I've sold stocks that have gone on to continue growing faster than what I reinvested in. Oh well!
I've also bought stocks that I thought were done falling, but continued to fall before catching back up to where I expected them to go.
Yes, if I had perfectly timed the market, I would have been better off. However, nobody can. You can try to learn about why so you can make better informed decisions in the future, but there is sometimes no reason at all.
Sorry, this whole thing is turning into its own post! -
Comment on Growth vs. value stocks in ~finance
shadow Link ParentThanks for the dead cat bounce! And that's a wonderful example of a potential growth stock, thank you for your contribution! As you noticed, the recent growth of Costco's stock has been slower...Thanks for the dead cat bounce!
And that's a wonderful example of a potential growth stock, thank you for your contribution!
As you noticed, the recent growth of Costco's stock has been slower than the overall market. Perhaps it's a blend of value and growth now?
Growth potentially because it still has that history of growing revenue by leaps and bounds every year and is expected to continue, but a little value now too because people were selling stocks in fear of tariffs biting Costco's bottom line?This is where anybody with an inkling about Costco would have to do more research. As mentioned, to find actual value or growth stocks takes lots of time and energy. Are tariffs not a huge deal? If research leads you to believe that tariffs are the reason for slower stock growth and those fears are generally unfounded because Costco will keep right on growing as a company, then it sounds like that stock would be a good buy!
I plan to do posts about an overview of fundamental analysis, then more posts about specific aspects of that analysis, using Yahoo Finance to look up a stock and compare to others, using stock screeners, understanding the terms on those screeners, actually buying and selling, market/limit orders, entry/exit points, diversification, short term vs long term and tax consequences in the US, short selling, options, all kinds of stuff! And anybody is welcome to make their own posts as well!
After all of this, hopefully everybody will be a pro at being able to actually analyze the numbers for the homework :) and anybody who wants can have a little side-money fun!
Not that every pick will be a winner, but overall hopefully it's a good experience. -
Growth vs. value stocks
One question you can ask yourself before you invest in a company: why do I think the value will increase and provide a good return on my investment? One reason is because the company is poised to...
One question you can ask yourself before you invest in a company: why do I think the value will increase and provide a good return on my investment?
One reason is because the company is poised to grow at a rate above the overall market. These are called growth stocks.
Another reason is because the company is valued lower than it should be right now based upon a fundamental analysis of its fair market value. These are called value stocks.
Growth
With a growth stock, the current price may already be high due to strong demand, because people think the stock will be worth much more in the future. That is the risk you are taking, because if the stock does not outperform the overall market, you are now behind.
Having a good knowledge of the market in which a growth stock company operates is very helpful. There may be market disruptions (AI anyone?) that lead to outsized expected growth. Look at Nvidia’s 5 year chart. Tell me when everybody figured out Nvidia’s chips were amazing for AI processing.
Or Amazon during the pandemic. Look at this chart and tell me when everybody figured out that if you can’t go to the store to buy things, you are going to need to order it online.
These companies were sitting in a market that, for whatever reason, had amazing growth potential. The companies were able to use their core strengths to jump ahead of the overall economy in terms of value creation speed.
Value
As mentioned, value stocks are those that, after lots of research into the company and market itself, you think the price of the stock should be higher than it is right now. And you expect that stock price to rise as everybody else realizes all the amazing things you already realized.
The stock could have been beaten down by some newsworthy event, which caused everybody to panic sell. These stocks are trading nowhere near their high marks. However, if you think the stock will get back up to that high water mark, you may have found a good value stock.
Now, determining which stocks that have suddenly dropped in value are actually value stocks takes research. You don’t want to “catch a falling knife” by the blade and end up bloody. You want to be able to catch the handle! Does the company have enough cash to weather any storm? Are creditors piling up? Is the photograph printing market shrinking incredibly fast and the company is not making the right decisions? Back to that fundamental analysis of the company itself - if you look at the financials and are impressed with the leadership's team ability to navigate that quick drop in stock value, then you found a winner!
Warren Buffet seems to think United Health is a value stock. As you can see, the stock is about half of its initial value. Buffet is in this for the long term and is hoping that his research is correct in terms of UnitedHealth potentially doubling back up to its previous value faster than the market as a whole would double. Either that, or he hopes his clout is enough to make it a value stock in that more people will invest just because he did.
Holy cow done
That about wraps up the difference between these two types of stocks. Many stocks are a blend of the two, also. But seeing the extremes helps with understanding this way to differentiate stocks. Yes, there are more specifics that I didn't fully get into. And yes I am trying to be as approachable as possible with the topic. Hopefully this helped you!
Can you find an example of a potential value stock out in the world currently? How about a potential growth stock?
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Comment on Investment club? in ~finance
shadow Link ParentI work as a fractional CFO, and I have made and lost plenty in my fun side investments over time. I constantly analyze my clients' businesses and help them with valuations. I'm no stranger to...I work as a fractional CFO, and I have made and lost plenty in my fun side investments over time. I constantly analyze my clients' businesses and help them with valuations. I'm no stranger to index funds, individual stocks, bonds, commodities, and options. Read a bit about forex but never dabbled. I have done well in crypto but don't want to do anything at all with that here.
I think gathering a group of people with different areas of expertise and interest will help bubble up great stock picks I would not have thought about on my own!
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Comment on Investment club? in ~finance
shadow Link ParentThe goal wouldn't be day trading or 100% vibes. The research period is too long. There would have to be a good fundamental case to be made. Technical can play a part, similarly with vibes, because...The goal wouldn't be day trading or 100% vibes. The research period is too long. There would have to be a good fundamental case to be made. Technical can play a part, similarly with vibes, because you have to feel good about it. But the idea in my mind is to hold these stocks for quite a while, easily over a year.
I might come up with a stock that I think will double in the next two years because (just throwing out random stuff) if a recession hits the company is positioned to make out like a bandit but if there's no recession they stay flat. That forecast is based on x, y, z. (So potential growth)
Or somebody finds a value stock that is unfairly being punished for something that recently happened, based upon the analysis done. Plus the CEO and exec team have a strong background in everything they need to have to turn the ship around. We poke around a little more at the market/competitors and all agree there's no reason for the stock being undervalued, so we commit.
There may be a stock that somebody sees as a fire sale and we all jump in to review and make a quick vibe decision for anybody who wants to get in on it. Who knows!
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Comment on Investment club? in ~finance
shadow Link ParentThat's great for sure. It's entirely possible that after every pick the group would post a write-up about the research process and what we liked enough about a company to decide to invest. With...That's great for sure.
It's entirely possible that after every pick the group would post a write-up about the research process and what we liked enough about a company to decide to invest.
With that, other interested people could take a look to see how we came up with our decision and apply that framework to their own research! -
Comment on Investment club? in ~finance
shadow Link ParentNaa, not every stock will be a winner. No disqualification, just more research/learning encouragement! If somebody brought a pick with a good feeling, my thought is we'd all dissect the company to...Naa, not every stock will be a winner. No disqualification, just more research/learning encouragement!
If somebody brought a pick with a good feeling, my thought is we'd all dissect the company to come up with a group consensus. Then anybody who still felt good about it can go invest whatever they want into it.
We would keep track of the stock price from that point on, and revisit the company every once in a while to determine a potential exit. -
Comment on Investment club? in ~finance
shadow Link ParentDepending on final interest, it may be the case that we're all spread out! If you can also pretty much buy anything global like @Chiasmic then location may not be as big of a factor as I was...Depending on final interest, it may be the case that we're all spread out!
If you can also pretty much buy anything global like @Chiasmic then location may not be as big of a factor as I was initially thinking.
Could be better in that we are all exposed to companies we would never have researched on our own! -
Comment on Investment club? in ~finance
shadow Link ParentYes, that's the idea. I'm not taking about my entire retirement in one stock picked from this group. But a reasonably meaningful "extra" amount spread out over a dozen picks or so, have a couple...Yes, that's the idea. I'm not taking about my entire retirement in one stock picked from this group. But a reasonably meaningful "extra" amount spread out over a dozen picks or so, have a couple losers, majority flat-ish, and one or two 5x-10x and we're good!
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Comment on Investment club? in ~finance
shadow Link ParentThat's definitely a good set it and forget it strategy as mentioned. I was thinking internal discussions would be private, but I can see an avenue where the final pick for that month or whatever...That's definitely a good set it and forget it strategy as mentioned.
I was thinking internal discussions would be private, but I can see an avenue where the final pick for that month or whatever is posted along with the reasoning.
Never hurts to get other people interested in a stock you just bought! -
Investment club?
Any interest in forming an investment club? We would meet regularly (TBD), learn techniques from each other, pass on knowledge and experience, and present our individual analysis. The chair would...
Any interest in forming an investment club?
We would meet regularly (TBD), learn techniques from each other, pass on knowledge and experience, and present our individual analysis.
The chair would keep people on track in between meetings, encouraging the hard work of spending your own time researching duds in the hopes that one of us finds a potential gem for us all to enjoy.
Theoretically, we would want to research company stocks that are easy for all to buy, so I would be interested in a group based upon major US indices. However, this thread could potentially be used by others to form their own group buying from other markets.
Edit: alright, I'm sending direct messages to those who expressed interest in wanting to contribute. Those who expressed interest in learning will potentially be able to learn with however the group decides to communicate to Tildes.
If you are interested in participating, you can leave a comment here or send me a message for now. Thanks!
44 votes -
Comment on You can't outrun a bad diet in ~food
shadow Link ParentThat and "fork putdowns are the best ab exercise you can do"That and "fork putdowns are the best ab exercise you can do"
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Comment on Tildes Game Giveaway: June/July 2025 in ~games
shadow Link ParentThis is fun, thanks a ton! I'll side with Francis the Fish. He's a very capable teammate when you're competing in the water section of the Avatar Olympics, but he becomes quite a drag on the rest...This is fun, thanks a ton!
I'll side with Francis the Fish.
He's a very capable teammate when you're competing in the water section of the Avatar Olympics, but he becomes quite a drag on the rest of the group when you're doing the air events. -
Comment on How does collecting differ psychologically from hoarding? in ~life
shadow Link ParentI do want to say that there is a fuzzy tipping point where the spectrum behavior becomes a mental illness. So in that case, yes, it is a fuzzy binary property. If you feel anxious without your...Mental illness isn’t a binary property. We all are on some spectrum.
I do want to say that there is a fuzzy tipping point where the spectrum behavior becomes a mental illness. So in that case, yes, it is a fuzzy binary property.
If you feel anxious without your teacups and scraps of paper, it's closer to a mental illness than not. If you like the way 10 teacups look, or you're having fun finding all 50 state quarters, not a mental illness.
Yes, it's all a spectrum, but we all don't have a mental illness.
The mental illness aspect comes into play if the behavior cannot be stopped or there is a feeling of anxiousness/dread or something like that. And it's continuous or recurring over a long period of time. A mental health assessment will let you know.
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Comment on The Naked Gun | Official teaser trailer in ~movies
shadow LinkOk... I'm going to watch this movie. So that was better than expected. I didn't have high hopes going in, and Liam is definitely too old to be doing any fighting (looked odd) but I definitely...Ok... I'm going to watch this movie.
So that was better than expected. I didn't have high hopes going in, and Liam is definitely too old to be doing any fighting (looked odd) but I definitely chuckled multiple times. Seems like it'll be worth my time.
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Comment on How come the mods on here keep editing the titles of my post to be exactly what they already were? in ~tildes
shadow LinkI know they remove Title Case from titles, which I agree. Maybe that?I know they remove Title Case from titles, which I agree. Maybe that?
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Comment on Post something from your notes app in ~talk
shadow Link ParentI get where you're coming from. During my first read, I had the first flash of thought/intuition that it wouldn't matter as well. But then thinking about it a bit more, you want to minimize the...I get where you're coming from. During my first read, I had the first flash of thought/intuition that it wouldn't matter as well.
But then
thinking about it a bit more, you want to minimize the time you are traveling the slowest.
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Comment on MIT’s new AI-powered tool accelerates startup ambitions in ~tech
shadow LinkArchive link: https://archive.is/h5lU7Archive link: https://archive.is/h5lU7
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MIT’s new AI-powered tool accelerates startup ambitions
6 votes
Thank you and Mimic for reminding us all that index funds are the best place to park the majority of your money!
Again, though, this post is in the context of the investment club, where people specifically mentioned using their side cash/fun money.
Most people wanted to learn more. Hence, this post. And the many others that will follow :)