Investing General Discussion

Sanrith Descartes said:

I dont expect PLTR to "recover" to those previous prices anytime soon. Recall the pre-issue price was around $7 and it came out at $10. Based on their financials I think the 9-10 range is the correct price for the stock to be honest. Good chance it turns a profit next quarter. That will turn cash burn to free cash flows.

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$8 is absolutely a fair price for PLTR at current "projected" performance. (2022-2024) I'll likely be looking at it <$9 if it gets there. Just like I did last time it was in that range. Sooner people forget about the bonkers levels from Feb 2021 the better, it was all just fantasy. We are all susceptible to it, paying over 10 x forward sales is a huge fucking no, and I should have tampered my excitement about what a company was doing (like MTTR) with the stock price just being too far disconnected to be investible. The urge can be strong, how many of us would think about over paying for SpaceX if given a chance. In the long run looking at what a company like PLTR will do over 10yrs these issues matter less. Buying Netflix a decade ago at $9 or at $30 may have felt crappy at the time but if you actually believe in the long term prospects a company will grow into your overpriced valuation. It's when they fail to do so that the entry pt comes home to hurt us. But a stock being down 50% can just be short term noise.

I struggle holding individual names for long periods that are volatile, and I'm pretty disciplined, I don't think anyone should beat themselves up over the learning pains of the process and just do the best we can to fight against our instincts that hurt us both in the up and the down.

If you can't ever escape the emotions volatility causes you must switch to low cost index investing and set it and forget it. If you can't help your portfolio the least you can do is get out of the way.

A company that has not yet followed the pattern of wiping out excess is Snowflake, sales came in last qtr at $334M and the company despite being down $100/share from peak is still valued at $84B. It's sales growth is just so strong still hitting 100% rev growth YoY. Even if it hits projections of $3B Rev in 2024 it would be selling at 28X sales assuming there was no price appreciation in the next 2 yrs. It would have to drop another 50% from this level to even enter the just "very richly priced" valuation range. It seems the high flyers are all being taken to the shed for slaughter one at a time except for the two fan favorites. Retails favorite in TSLA and wall st favorite SNOW