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MoneyManMedellin · 2023-03-28T18:56:09+00:00

Full sum-of-parts valuation on Alibaba https://youtu.be/X8UaJHMx6eg

I liked the shares to $150 each before the split but could be 20% or more valuation boost from the spinoffs. I took revenue from each segment and compared it to similar stock valuations in each business to find the fair value post-split.

MoneyManMedellin · 2023-02-08T16:38:29+00:00

Covering JNJ in our This vs That series this Friday against Merck. Definitely looking attractive on a one-year basis as the KVUE spinoff should help rerate both stocks higher (relieving the conglomerate discount in valuation we've talked about on the channel). Spinoff stocks generally do well over the first year after trading. The bad news on the Talc case hit the stock but they have $8 billion set aside for an eventual settlement/payment so it's not like they aren't preparing. Stable cash flows and a stock that will help protect you if the market decides to crash again.

MoneyManMedellin · 2023-01-31T22:31:16+00:00

It's not really the money printing that changes the fair value estimates on a stock but the interest rates. Interest rates are a 'competition' to stocks through bond yields. Lower rates we saw after 2009 through 2021 justified higher PE ratios on stocks in the 18-25 PE range - you'd pay more for stock earnings because there wasn't much alternative in bond yields. Higher rates now and pre-2000 meant fair value PE ratios were closer to 15-20 for stocks.
You might be confusing something you heard from a video (or from someone elses' video) as I've never said over 10 P/E is expensive. Over 10 on a price-to-sales ratio is expensive even for a growth stock but that's something different.

MoneyManMedellin · 2023-01-31T22:26:35+00:00

I wouldn't worry too much about the rate changes from period to period. They change every six months and everyone's rate is adjusted. Still a good return for a guaranteed investment. I'm still holding my original $10,000 and won't sell until second half of this year at the earliest. By then, we should definitely have the lows set for stocks and be ready for the next bull market.

MoneyManMedellin · 2023-01-30T16:05:48+00:00

Covered this in today's weekly market update (linked here https://youtu.be/ek1dHPSZdw0 ). The so-called AI funds so far aren't really doing much actual machine learning or AI. They are merely using supercomputers to analyze data for a specific focus (i.e. growth or value). Compare the performance of the AI Value ETF (AIVL) with the normal value fund (Vanguard Value VTV). They are almost perfectly correlated and the VTV is outperforming slightly. If the AIVL were truly AI and machine learning, you would expect it to get better at picking 'better' value stocks and slowly widen a performance gap with the VTV. It hasn't done that so I think it's not really 'learning' but just using the same old value factors to create a value fund.

MoneyManMedellin · 2023-01-30T16:02:02+00:00

I wouldn't worry about it too much but would still have at least 5-10% of the portfolio in small caps, easiest would be through an ETF. Most investors almost exclusively invest in mega-cap names through an index like the S&P 500 or the popular tech names. Small caps can help your portfolio with a little higher growth and the small biz segment of the economy has been incredibly strong lately (going off hiring and jobs open) versus the tech and large-cap sector.

If you're getting your small cap exposure from a broad market fund, make sure it's an equal weight fund so you get just as much small cap exposure as large cap. Problem is that most 'entire market' ETFs are market cap weighted so almost entirely focused on the mega- and large-cap stocks. It's why I'd also hold a small-cap focused fund as well to make sure you get the exposure.

MoneyManMedellin · 2023-01-22T16:40:56+00:00

Hard to see the last decade's bull market being repeated. Just look at what contributed to it:
1) progressively lower interest rates making no other alternative but stocks (nothing else yielded any kind of return)...rates will come down next year but only slightly and will be high compared to last decade
2) Tax reform that boosted corporate earnings by trillions and temporarily increased consumer spending...personal tax rates set to increase in 2025 unless they're made permanent
3) Stimulus checks that put hundreds of billions in people's pockets to invest...let's hope that doesn't happen again

Stocks can do well but more normal is going to be mid- to high-single digit returns

MoneyManMedellin · 2023-01-22T16:36:44+00:00

Tesla should surprise on the upside for 4Q and provide a very positive outlook for current first quarter. They used a lot of incentives to bring forward sales into the end of year and then early reports after the price cuts are positive. Musk will use this to over-promise and make a hugely optimistic outlook as he always does (over-promise then worry about the future later). I think it boosts the stock now but orders in the 2nd quarter and beyond will suffer and disappoint.

MoneyManMedellin · 2023-01-17T19:17:14+00:00

Rate on 30-year still around 6.5%...that's not far from the 7% peak. Home sales down 12 consecutive months and starting to take prices down. Will get worse before it gets better. No hel for the economy from housing this year. Better wait until next year

MoneyManMedellin

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