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Thanks. If it's a business that is growing really fast where earnings could potentially catch up to a high valuation I will keep holding sometimes, but not with a relatively mature, slowly growing business.

Well, I've been long INMD and STNE for over a year now. I think INMD has growth challenges. STNE has more potential, but just have to wait and see. Gross margins are actually not a metric I care much about. I've investing in companies that have very low margins, but have still performed extremely well, and vice versa. The main thing I ask myself with growth stocks is 1) are they profitable or about to be profitable, 2) how cyclical might the business be, and 3) how long can they continue to grow at a fast rate. If those look okay, then I look at valuation to make sure they aren't crazy expensive. I actually don't make much distinction between small caps and larger businesses, except at the extremes. It's unlikely huge mega-caps have the same growth potential as a growing small-cap, but some micro-caps on the other hand, might not have enough volume for CIC member to easily build or sell a position.

I suppose it had to come to an end eventually. Still having a great season, though.

Hahaha! I love it. I am always trying to expand those skills, of course, but that is a fairly long process because it takes a few years to really hone in a new strategy.

I covered it in this video ruclips.net/video/H_V0hhhhnmQ/видео.html

Yeah, this stock has had a fantastic run.

I agree. I've never seen an auditor resign and had good results follow.

Personally, if I had owned it, I would have done what you did and get out. There is no way to quantify the risk in my opinion.

Thanks for the question. The way I express my "intrinsic value" if via the 10-year earnings CAGR estimate. I consider 6.5% to be the midpoint of "fair value" so that works out to a price of $188 for GOOGL. Which would make it slightly below fair value if they can grow earnings 13% per year for the next decade. My buy prices are lower than that because I want a margin of safety.

I have added this one to my list.

I added BMW to my list.

Yeah, there has been no relief once that decline started.

I've been long STNE for a while, so I like it better. I don't think I would buy it with new money until it gets some positive momentum, though.

Yeah, I think the big issue is it's impossible to know how bad things will be.

Best to avoid stocks run by people like that.

I agree.

@@setsunasoon3470 EY quit based on independent lawyers report. EY ran away because of that. EY did not play a role of auditor for 18 month rather

It isn't isolated to SMCI here is a video I made with about 50 data points of the recent SPY additions. ruclips.net/video/dyGFfXscYWw/видео.html

Okay. That makes me think things might be worse at SMCI, though.

@ maybe but also their is no evidence yet. Everything on Hindenburg is speculation and relies on past employee or employees. I am guessing it’s just one cause Hindenburg claims all the fraudulent employees were hired back. What doesnt make sense is how did Hindenburg get a hold of these employees? Did the employees just wake up and say let me call Hindenburg? Somehow people at Hindenburg found out the employees and the employees told the full story to Hindenburg for free? 🤔 just doesn’t sound right. Smci may have done some similiar 2018 accounting BS but if that is the case then the pain trade is actually up. If somehow they messed up on the accounting but the sales numbers are true, pain trade is still up. There is so many scenarios in regards to this but everyone is expecting the worse which I understand. The stock is now 35% shorted and if their is any hint that the sales numbers are ok a lot of people lose more money then the people who stayed long which is the ironic part. Now the question is why hasn’t the mgmt team said anything? What is there to say? They start talking to much it looks like their panicking??? Maybe … it’s not like the CEO is well spoken anyway. My point is everyone and their dead grandma is short this stock and everyone is thinking the same way. From my experience when that happens sometimes we get the “Kansas City Shuffle”. 🤷‍♂️

Certainly could be.

Not possible due to institutional investors bowing out. Market cap is too big for WSB to manipulate

There will be for sure but only to sell more onto retail. If you sell with them at the end of the bounce good for you otherwise you’ll get screwed.

I'm not an expert on this but I think it's standard practice to have an outside accounting firm.

not standard practice if you are manipulating accounting. Why hire a major firm you know will find out you are crooked?

One would think that Nvidia wouldn't deal with a totally fraudulent company.

If it's true then an electrical engineer was dumb enough to do something where he loses all his money and goes to prison for ten years. I just don't believe that's the case. What I do think they did was play a shell game with their family owned subsidiaries to make their numbers look good even in bad quarters. These are cyclical businesses and they where only going up. So they pump and dumped their own stock? That still doesn't make any sense as the CEO is a majority stake holder. I dunno, I bought a small position and it's a heck of a bet.

It has gotten pretty bad in recent years, especially. But because of the size of the Mag 7 it has been masked. The recent additions to the S&P 500 the past 3 years have horrible returns.

For the record, I thought the stock was risky back in February before any of the accounting issues when the stock was rocketing higher so I don't think I'm following anyone else's lead here. How many S&P 500 companies has EY resigned from in the past decade? I can't think of a single one. How can a person value the stock/businesses if they don't know what the actual earnings have been? Really, just out of principle I don't invest in businesses that don't have clean accounting. There are too many good businesses out there that don't have these issues.

To add on, the share buyback could be just an act

They have to in order to appear innocent and blind to the falsehoods. That's why they're buying. Paying a small price in hopes to avoid prison.

Too much Risk either way.

I am a long only investor and I don't trade options because I don't think I have any kind of edge over professional traders over short time periods. So, in situations like this, I just put the stock in the avoid pile and move on to find something better.

Yep.

It's pretty standard for the accounting firms to resign in situations like this. And I've never seen a time where it turned out good for the stock.

@thecyclicalinvestorsclub6657 There is no actual facts other than accusation such as integrity, or no transparancy. EY was with SMCI over 18 month, and did not realize until hindenburg report. what kind of professionalism does EY have??? This smells like organized crime.

Thanks for the comment. I think the problem is that there is a lot of overlap between the skill it takes to select good individual stock investments and have good overall strategy and the skill it takes to identify a good fund or money manager. So, we don't really solve the central problem in most cases.

Thanks for the comment.

Explain why at least

It's sounds like you understand what the risks are, so best of luck with the investment.

@ it’s a gamble that could turn into an investment. It’s a binary outcome either they pulled forward some unrealized revenue which is pretty bad depending on how much or the company is a complete fraud which I consider highly unlikely considering who thier customers are and who their partners are. The sector is real and from what I’m hearing the Magnificat 7 have no intention of slowing on AI, data centres need their products none of that has changed.

I think with the short report one could have reasonably wondered if this was just a pulling revenue forward situation, but with EY resigning, I suspect it's worse than that.

If you invest long enough, something like this will happen eventually.

Thanks for the feedback. This video in particular had audio I was playing from a previous video off my computer (and an emergengy vehicle went by as well). Hopefully I can produce better audio in the future.

@@thecyclicalinvestorsclub6657 Thanks for the answer. The clarity seems OK it's really just the overall volume level. Have a good weekend!

16500$ something you can afford to lose? Not bad

I bought 100 shares at 26 , I prefer losing 2500 dollars over missing an opportunity.

I honestly doubt they get delisted unless they never refile their earnings. It will be interesting to see what happens. Best of luck.

@OlivierMertens-dq3hh Same here bro, no risk no gain

@@thecyclicalinvestorsclub6657 they were delisted 5 years ago for the same thing bro , 2nd time is really bad lol

I did post a full CROX video over on Patreon a while back, but my basic take is that it goes in the 'too hard' category. I did talk about it in this video as well ruclips.net/video/H_V0hhhhnmQ/видео.html

@@thecyclicalinvestorsclub6657 Thank you!

Probably right that increasing labor costs is the primary issue right now.

You bet!

I put PEP on the list. REXR uses my REIT strategy, which is exclusive to the full CIC service on Seeking Alpha, but I did actually sell REXR last week after having owned it for about 4 years. I thought they had a good chance to buck the negative REIT trend, but in the end, at least for now, they weren't able to do so. So, it's not a buy for me right now.

@thecyclicalinvestorsclub6657 Thank you for responding! I keep on adding REXR when it falls below ~$43. I just discovered your channel today, so I haven't checked out all of your videos. I did subscribe. If you haven't already, can you please review HSY, GPN as well?

Thanks for the sub. I sold GPN this summer along with a group of other stocks. I covered it in this video I think ruclips.net/video/gdhW9ArSC8M/видео.html I do have a video for HSY from last year at this but I will put the ticker on my list for an update video.

I was referring to China, not me.

Yeah, I probably framed that wrong. I should have said it will take 50 to 100 years of dividends to make up for the loss of capital.

Correct. They are certainly taking market share.

Yeah, it's interesting to see when several issues converge (being overpriced, increased competition, and geopolitical problems) the results can be extremely bad for investors.

@ indeed. Also the generational shift in consumer brand preferences. Jo Malone is their standout brand and I think they’d looking to capitalize on that by focusing on fragrances.

I think the main thing here is that longer-term they haven't grown earnings well, which is my main goal for a stock investment. As a trade, rather than an investment, there might be people who can trade it well from here, but I'm not one of those people. For every stock of this profile I bought after a crash like this an got right, I would probably have 3 or 4 that kept going down or did nothing over the medium-term. So, I accept that sometimes I might miss out on the gains with a particular stock because statistically I know I couldn't repeat that success.

It's a pass for me until it gets through a recession successfully

I just try to learn from my mistakes.

It's certainly possible. Lot's of smart people working there and they have the taxis going now.

Yeah, bond markets have been moving, but...they've been wrong a lot more than normal lately.

Just put out an HII follow-up

Looks like they had a huge earnings miss this morning!

I would want clear signs earnings had bottomed and were growing again. Here are my thoughts from a year ago ruclips.net/video/h50-C3tb8u8/видео.html