Thanks for making me look smart yet again, Chuck. Of all the discussed stocks, I own only ABBV since Feb. 2020 at about $85. Also, please stop calling yourself old. You and I are about the same age, so you can't possibly be old.
It can require a LOT of patience. But you also have to be flexible and recognize an opportunity when it plops down in front of you. That's actually the hardest skill of all.
Hey Chuck! This video just popped up in my feed and helped me by adding color to Graham and Buffet thinking. Thank you for putting in the time and your expertise. Cheers!
Another excellent teaching video. I look forward to a day when I am skilled enough to use the FASTgraphs tool to interpret stocks half as well as you do. Thanks and I appreciate the last few videos where in each you describe how to look at and interpret the story that FASTgraphs is telling. Please keep them coming.
Wonderful video. This is why I don’t get it when companies miss earnings and stock price still rises over and over. Like the railroad stocks many of the times. Can you break down rail road stocks some time?
Buying the weakness is simple, makes sense, but difficult to execute. It is against the human nature, but it is the precise reason why retail investors as a whole are doing so poorly in the long term.
Great vid as always. I would like to see your view on Microsoft (great fundamentals etc) but ofc a high valuation. Still Microsoft has really promising stuff for the upcoming years like XCloud, Azure (with also focus on healthcare via their recent acquisition of Nuance). And ofcourse their buyback program.
Chuck, I'm your permanent reader and subscriber for many years, thank you for your work. I have a question for you to ask: what if all these presumed overvaluation of most good companies at this point just reflect high incipient inflation? In other word, what would happen with the fastgraph valuation charts if we assume, let say, 10% inflation? Is it reflected in the forecast part of the fastgrapph?
Dmitry Drob: if that were to happen then valuation becomes even more important because you would need to make as much money as you possibly could. Overvalued stocks will not perform in the long run as Ben Graham taught: "buy not on optimism, but on arithmetic."
Really admire your work Chuck, thanks! As with all the stimulus plans, don’t you think the mean PE (20) should be higher than I previously was? Obviously this is not supported by the fundamentals, but given the fact that everyone invests in well known names such as Apple, due to the fact that the interest on savings account is so low, perhaps this justifies a higher price?
M P: to me, this is a discussion about market price versus intrinsic value. Intrinsic value is always a function of the cash flows the company is generating on your behalf. When you pay too high a price, you are reducing your cash flows, and saying you are willing to accept that lower return at a higher level of risk. Here is what I said on it in the past: "I care about what you the investor deserves more than I care about what the stock deserves. In that vein, I do not think it is prudent or wise for investors to take on more risk (pay too high a valuation) while simultaneously accepting a lower rate of return for doing so. It is an absolute fact and a mathematical reality that when you overpay to invest in a stock you take on greater risk while generating a lower future rate of return. The most basic principle of prudent investing is the exact opposite. You’re wise and prudent when you buy low and sell high." Regards, Chuck
This was a fantastic video. I’m going to go back and watch all your videos.... i see you use PE 15 as fair value, do you think this benchmark should change depending on the industry average?
D M: here's a link to an article written on the subject www.fastgraphs.com/why-a-15-p-e-ratio-is-fair-value-for-most-companies/ the bottom line is that a 15 P/E ratio equals a 6.67% earnings yield which is really a minimum threshold for me personally. Regards, Chuck
@@FASTgraphs thanks for this reply and your article was a great read. Can I follow up with an additional question please...... Charlie munger recently said in an interview that a current trend is more people are investing in the stock market than in previous decades..... is it possible that due the internet and higher financial education that the demand for securities have increased and therefore the historical PE 15 isn’t justified anymore.... could PE20 be the new normal as an example due to more people bidding for businesses and defining a higher fair value collectively (combined with lack of opportunity elsewhere due to interest rates etc)
@@DanielMorrison1 : I want to try to keep this response as simple as possible.. A P/E ratio is simply a metric that can be used to assess value. The secret is the inverse or the E/P which produces earnings yield. This simply tells you what your yield would be if the company gave you 100% of their profits. So let me ask you a question, would you rather have a 5% return (P/E equal to 20) or a 6.67% return (P/E equal to 15)? As I also said in a previous piece of work. I am only concerned about what you the investor deserves not the valuation that the company theoretically deserves. So you may be describing a new normal market value. That would equal the voting machine aspect of Ben Graham's famous quote. However, I am concerned about the weighing machine aspect of his quote. There's a difference between market value and intrinsic value. As an investor, I am looking for intrinsic value because that is substantive. Market value can be very fleeting because it is based on sentiment and not solid fundamentals. Hope that helps, Chuck
Imagine weekly buying from when it started becoming undervalued and then abbvie explodes,, then look at Lockheed it had 4 years of being undervalued, that one stock would have made you retire early
Especially hard to achieve success as needed patience to wait for price to drop to a margin of safety level, then need patience for the price to begin it's rise, then patience to hold it once it has begun the ride up. I wonder if this may be an argument for most to hold an index as then all this is occurring in the background and they just need to keep the index. May not achieve as high a return as with the individual stock, but gets around the patience issue somewhat.
Chest Dad : You should also consider that you can overpay for an index just like a stock. For example, I believe if you invested in the S&P 500 index today you would be paying way too high a price. Regards, Chuck
Why is the divergence between price and earnings so huge in companies like Global Payments, Synovus, Comcast... (undervaluation) and companies like Nvidia, McDonald's, Southern Company... (overvaluation)? Can't be that the market is so inefficient with all the Wall Street and big institutions analysts.
This is the best investing channel for investor young & old. Thank you for all your hard work.
Great Channel! I'm 35 and I am listening very carefully to you.
Thanks
So very helpful... thank you!
Very Informative
If you are at a poker table and don't know who the patsy is...it's you! You saved your best advice for last Chuck!
I am learning a lot from your videos, thank you for your work! This is real value creation.
Congratulations on 20k Subscribers
Thanks for making me look smart yet again, Chuck. Of all the discussed stocks, I own only ABBV since Feb. 2020 at about $85. Also, please stop calling yourself old. You and I are about the same age, so you can't possibly be old.
I love this channel. Learning so much from Chuck! 👍
Thanks Chuck and Polly - TImeless Advice.
Steve: thanks we appreciate it.
Mr. Valuation strikes correct again. Value-add content as always.
You are a true voice of reason. Thank you Chuck.
Always good to see other value investors and some common sense among all this madness and ignorance. Gives back a little bit of hope.
Great presentation on value. Thanks for all your hard work and contribution in helping investors.
Great work Chuck, always love your insights - you are the voice of reason in a crazy marketplace
Very clear message Chuck.
Love the product.
It can require a LOT of patience. But you also have to be flexible and recognize an opportunity when it plops down in front of you. That's actually the hardest skill of all.
Hey Chuck! This video just popped up in my feed and helped me by adding color to Graham and Buffet thinking. Thank you for putting in the time and your expertise. Cheers!
Amazing video, probably the most I've learned in half an hour in a very long time.
the VIRIP Principle- I like it!
Fantastic presentation - thanks & I’ve subscribed!
When is FASTgraphs going public Chuck?
Thank you Chuck for an excellent video! All the best to you.
Thanks for the video Chuck.
I hope it doesn’t take 5+ years until we can find some more good value in the “market of stocks”.
herodax: in every market whether a bull market or a bear market there will always be value to be found. Regards, Chuck
@@FASTgraphs you’re right of course!
Thanks for all the value YOU create and share here on RUclips and with FG.
Awesome, thanks for sharing! If I had to limit myself to one RUclips channel only, it would be yours.
The graghs looks very useful
I’m still working on the Patience Part of Investing. It’s not easy.
Another excellent teaching video. I look forward to a day when I am skilled enough to use the FASTgraphs tool to interpret stocks half as well as you do. Thanks and I appreciate the last few videos where in each you describe how to look at and interpret the story that FASTgraphs is telling. Please keep them coming.
Wonderful video. This is why I don’t get it when companies miss earnings and stock price still rises over and over. Like the railroad stocks many of the times. Can you break down rail road stocks some time?
Buying the weakness is simple, makes sense, but difficult to execute. It is against the human nature, but it is the precise reason why retail investors as a whole are doing so poorly in the long term.
😍😍😍
Great vid as always. I would like to see your view on Microsoft (great fundamentals etc) but ofc a high valuation. Still Microsoft has really promising stuff for the upcoming years like XCloud, Azure (with also focus on healthcare via their recent acquisition of Nuance). And ofcourse their buyback program.
Chuck, I'm your permanent reader and subscriber for many years, thank you for your work. I have a question for you to ask: what if all these presumed overvaluation of most good companies at this point just reflect high incipient inflation? In other word, what would happen with the fastgraph valuation charts if we assume, let say, 10% inflation? Is it reflected in the forecast part of the fastgrapph?
Dmitry Drob: if that were to happen then valuation becomes even more important because you would need to make as much money as you possibly could. Overvalued stocks will not perform in the long run as Ben Graham taught: "buy not on optimism, but on arithmetic."
Really admire your work Chuck, thanks!
As with all the stimulus plans, don’t you think the mean PE (20) should be higher than I previously was? Obviously this is not supported by the fundamentals, but given the fact that everyone invests in well known names such as Apple, due to the fact that the interest on savings account is so low, perhaps this justifies a higher price?
M P: to me, this is a discussion about market price versus intrinsic value. Intrinsic value is always a function of the cash flows the company is generating on your behalf. When you pay too high a price, you are reducing your cash flows, and saying you are willing to accept that lower return at a higher level of risk. Here is what I said on it in the past: "I care about what you the investor deserves more than I care about what the stock deserves. In that vein, I do not think it is prudent or wise for investors to take on more risk (pay too high a valuation) while simultaneously accepting a lower rate of return for doing so. It is an absolute fact and a mathematical reality that when you overpay to invest in a stock you take on greater risk while generating a lower future rate of return. The most basic principle of prudent investing is the exact opposite. You’re wise and prudent when you buy low and sell high." Regards, Chuck
I don't think I could use Fastgraphs but I was wondering what you think about LUMEN if it has possible growth
This was a fantastic video. I’m going to go back and watch all your videos.... i see you use PE 15 as fair value, do you think this benchmark should change depending on the industry average?
D M: here's a link to an article written on the subject www.fastgraphs.com/why-a-15-p-e-ratio-is-fair-value-for-most-companies/ the bottom line is that a 15 P/E ratio equals a 6.67% earnings yield which is really a minimum threshold for me personally. Regards, Chuck
@@FASTgraphs thanks for this reply and your article was a great read. Can I follow up with an additional question please...... Charlie munger recently said in an interview that a current trend is more people are investing in the stock market than in previous decades..... is it possible that due the internet and higher financial education that the demand for securities have increased and therefore the historical PE 15 isn’t justified anymore.... could PE20 be the new normal as an example due to more people bidding for businesses and defining a higher fair value collectively (combined with lack of opportunity elsewhere due to interest rates etc)
@@DanielMorrison1 : I want to try to keep this response as simple as possible.. A P/E ratio is simply a metric that can be used to assess value. The secret is the inverse or the E/P which produces earnings yield. This simply tells you what your yield would be if the company gave you 100% of their profits. So let me ask you a question, would you rather have a 5% return (P/E equal to 20) or a 6.67% return (P/E equal to 15)?
As I also said in a previous piece of work. I am only concerned about what you the investor deserves not the valuation that the company theoretically deserves. So you may be describing a new normal market value. That would equal the voting machine aspect of Ben Graham's famous quote. However, I am concerned about the weighing machine aspect of his quote.
There's a difference between market value and intrinsic value. As an investor, I am looking for intrinsic value because that is substantive. Market value can be very fleeting because it is based on sentiment and not solid fundamentals. Hope that helps, Chuck
Imagine weekly buying from when it started becoming undervalued and then abbvie explodes,, then look at Lockheed it had 4 years of being undervalued, that one stock would have made you retire early
Especially hard to achieve success as needed patience to wait for price to drop to a margin of safety level, then need patience for the price to begin it's rise, then patience to hold it once it has begun the ride up. I wonder if this may be an argument for most to hold an index as then all this is occurring in the background and they just need to keep the index. May not achieve as high a return as with the individual stock, but gets around the patience issue somewhat.
Chest Dad : You should also consider that you can overpay for an index just like a stock. For example, I believe if you invested in the S&P 500 index today you would be paying way too high a price. Regards, Chuck
@@FASTgraphs true
Musical Chairs with your money. LOL
Why is the divergence between price and earnings so huge in companies like Global Payments, Synovus, Comcast... (undervaluation) and companies like Nvidia, McDonald's, Southern Company... (overvaluation)?
Can't be that the market is so inefficient with all the Wall Street and big institutions analysts.
Chuck
If I did . Well I didn't. How does someone nearing retirement invests? Does he or she stay out of the market ad some suggest
Chicken Feed :-D
You keep.using the phrase " if you did buy this at". Well I did not. I want you to gives ideas or suggestions about the future, not the past