You wrote:"It's interesting to think that you could arrive at a real mathematical value for Gorilla-ness in this way"
Using common wisdom, we are able to estimate the NPV of gorillas. Based on my rough calculation, NPV(5% 10yrs), GMST is $32.31, ELON is 8.25, CREE 58.59, NTAP 42.98, while WM is $56.23 (price now $26), MO is 56.35 (price $19 w/ 9% yield).
Common sense also tells me that the interest rate is the discounting mechanism for valuing asset based on the concept of present value of future earning. The high valuation of tech stocks are based on high expectation of future earnings. the value of such very remote earnings fall exceedingly quickly as the discount rate rises.
Most of us never experienced bear before. But today, mindless speculation, rich valuation, worsening bad breath and disregard of value (I sighed when I read the WSJ saying VALUE fund managers were forced to pick tech w/ their hands shaking), vertical movement of QQQ, all direct us to an answer that we refuse to say YES.
Lastly, the common sense tells me that if the hedge fund were to short QQQ in the near future, near term rally w/ weak volume would be expected. Anybody go Kaiyak here-- turning the direction of the Kaiyak creates tremendous amount of turbulence (volatility), that is exactly where we are now.
PS, this is JUST my personal view about the TECH gorillas. THEY ARE SUBJECT to fall if valuation is out of norm. |
