I'm tired of "Stocks are gambling" nonsense like this. Some companies are valued on the fundamentals. In fact the best investment in the world right now is AAPL, which trades generally between 12-14 times its trailing EPS. This recent "miss" was a "bad earnings quarter" and even then it grew at %20 year over year. (The lowest in the past 4 quarters by far).... but if Apple was a company that only and always grew at %20 year over year, then "on the fundamentals" Apple should be trading at 20 times EPS.
This makes Apple a screaming deal. There are other good stocks out there, and if you decide to trade on the fundamentals, you can make great returns. Its not very difficult.
The thing is, part of the reasons it is so easy is that almost the whole world has convinced themselves that its impossible and instead doesn't invest or puts their money into index funds.
>"I'm tired of "Stocks are gambling" nonsense like this."
Definitely in agreement with you here.
>"Its not very difficult."
I assume you have a portfolio that's been killing it. Would you mind posting your results?
>"but if Apple was a company that only and always grew at %20 year over year, then "on the fundamentals" Apple should be trading at 20 times EPS."
The problem is predicting that a company the size of Apple will grow 20% y/y forever. What fundamental reason do we have to believe that? We're sort of in uncharted territory there. For all we know, Apple's decline starts next year. That's the difficulty of this.
>"puts their money into index funds."
There are sophisticated financiers who insist that index funds offer the best value in investing. The world is filled with people who think it's "easy" to get "great" returns in the stock market. The reality is that in an efficient market there are no "great" returns, only average returns. Those returns are based on a function of risk (so the expected returns are the same) and some time value of money.
> This makes Apple a screaming deal. There are other good stocks out there, and if you decide to trade on the fundamentals, you can make great returns. Its not very difficult.
The thing is, part of the reasons it is so easy is that almost the whole world has convinced themselves that its impossible and instead doesn't invest or puts their money into index funds.
Really, it's not that hard? Do you have a track record to point to?
It's been my experience that most people who say "it's easy" are those who look back and say, yea of course I knew the tech bubble would burst at exactly that point, etc, etc.
There is a saying, right but early is wrong, right but late is wrong. Sadly, it's often not enough to just be right, you either run out of money or nerves, often both:)
This makes Apple a screaming deal. There are other good stocks out there, and if you decide to trade on the fundamentals, you can make great returns. Its not very difficult.
The thing is, part of the reasons it is so easy is that almost the whole world has convinced themselves that its impossible and instead doesn't invest or puts their money into index funds.