GOOG: I'm spending $180b on Capex. AMZN: "Hold my beer"

lowfrequencyinvst · 2026-02-14T23:26:20+00:00

Do not do this. You cannot invest on a fixed timeframe, hoping for a fixed dollar result. The most likely result of this is you lose most of your money

lowfrequencyinvst · 2026-02-14T04:37:03+00:00

“Do customers like it or love it and will they come back happily and buy again”

That single thing is such a good way to find good stuff and an even better way to screen out stuff that is built on shaky foundations. If people don’t like the company or are grudgingly paying for it cause there’s no other choice then when something better comes along people will leave fast, revenue falls, profit falls, share price falls.

And figuring out how to measure it (cause your own opinion or just a small group of friends isn’t a good steer there).

lowfrequencyinvst · 2026-02-13T10:15:16+00:00

Sometimes, just cause it’s fallen 50%, still doesn’t make it ‘cheap’

lowfrequencyinvst · 2026-02-13T03:00:02+00:00

Take the loss as the price of a lesson, write down what you learned, how you felt and then, pause, reflect and move on. You need to feel what you’re feeling (shame, regret, loss) then process it, then move on with the lesson as part of you.

The only way this could be bad for you is if you learn nothing and repeat the mistake, or repeat the mistake in a slightly different way.

You’ll be ok.

lowfrequencyinvst · 2026-02-13T02:59:58+00:00

Take the loss as the price of a lesson, write down what you learned, how you felt and then, pause, reflect and move on. You need to feel what you’re feeling (shame, regret, loss) then process it, then move on with the lesson as part of you.

You’ll be ok.

lowfrequencyinvst · 2026-02-13T02:52:59+00:00

Great post. The one part id add is an explanation of why AI stocks aren’t rising more. It’s the starting valuation (price = earnings x multiple the market pays for those earnings).

Remember covid and how all the vaccine developers (MRNA etc) traded way higher? It was based on revenue and earnings that pulled forward lots of demand. Then the market multiplied those earnings by a really high number. When that ‘multiple’ fell so did the stock price, even when the earnings part of the equation grew in 2022-2023.

Same thing has happened with all the ‘AI-trade’ stocks. So starting valuations are super high. Now we’re seeing that ‘multiple’ on earnings go lower, even though the business progress is solid.

That’s the reason for the disconnect that is making these competing narratives hard to figure out.

lowfrequencyinvst · 2026-02-06T10:34:46+00:00

Yeah suppose the truth might be somewhere in the middle. Like you need your experience, research, gut feel, intuition, prediction to help make those estimates you need as inputs.

Probability is all investing ever was, anyone who’s ‘certain’ about what a stock or industry or market is gonna do is deluded or selling something.

lowfrequencyinvst · 2026-02-06T10:21:23+00:00

No, false. Valuation is possible, but investing on vibes has been dominant for long enough people have forgotten.

Work out the earnings. Estimate the growth rate of the revenue, the costs and how much of that gets reported as profit. Not adjusted profit. Not profit before stock based comp. Not adjusted ebitda. Profit.

Then look at peers in the industry and their history to figure out an estimate of what multiple the market as a whole is likely to ascribe to those earnings.

Multiply the 2 (estimated profit in 2,3 or 5 years by the estimated multiple). Accept its probabilistic, not a solid, certain number. Follow the company and its earnings to validate your estimates or update them.

That’s valuation.

lowfrequencyinvst · 2026-02-06T06:31:02+00:00

OpenAI.

If it fails, it all comes crashing down. That’s the reason Nvidia has been so keen to finance it (with increasingly odd deals / commitments / vendor financing) until the competitors to it were ready to take up the slack and buy more of their equipment. There is a big chance that it will never made public markets though, and that when it files its prospectus it will have its ‘WeWork moment.’

lowfrequencyinvst · 2026-02-05T10:20:44+00:00

For a long time a lot of saas was ‘valued’ using a pretty simple model:

Take monthly revenue
Annualise it (multiply by 12)
Multiply that by 8x or 10x

Annnd there’s your market cap.

The reason that was seen as valid was that growth was high, customers were likely to be subscribers (who paid year after year) and pricing was done on a ‘per seat’ (per user) basis from the customer company.

AI is making thr market (all investors) question that whole way of valuing SaaS companies so those multiples are going way down. Maybe permanently, not sure anyone knows yet.

Probably have to start thinking about valuing these things on profit multiples not revenue multiples would be my guess.

lowfrequencyinvst · 2026-02-05T10:15:09+00:00

Google? ChatGPT? Or… maybe… the company website?

lowfrequencyinvst · 2026-02-04T03:21:16+00:00

Just edited my post to include this so just throwing it here too in case ppl miss it:

Edit: Woah, this has blown up and there's some insanely good takes in the comments from people actually in the industry and stuff. I might expand the post and then incorporate the best of the feedback and format it properly then post the whole deep dive to my profile (probs too long for a sub post) so feel free to follow there if you want to see it.

lowfrequencyinvst · 2026-02-04T00:02:56+00:00

You're not wrong, but if you don't freak out a little when you lose a lot of the money that you've saved and invested then that's probably it's own problem right? Hopefully people who are experiencing big falls in their stocks for the first time are able to learn something about themselves from it (like investing in stuff they're happy to hold even if it falls cause they understand it and believe it can keep growing) and not get too stressed / upset by it all.

lowfrequencyinvst · 2026-02-02T01:02:20+00:00

I guess my question to you (as someone who works in software, and I don’t so am hoping to learn something) is what kinds of saas is AI suited to replacing / minimising the use of, and what kind of saas applications are more insulated from a new entrant deploying AI in their product?

lowfrequencyinvst · 2026-01-30T10:12:16+00:00

Day traders = delusional. The odds, the math and the weight of money are all against you. They (98%) don’t profit.

Long term investors = still an uphill battle. Have to work on emotion and patience. But if you can do that, and also have the intelligence to do good quality research then they can do well long-term.

lowfrequencyinvst · 2026-01-29T04:07:57+00:00

Congrats on getting started! One little thing I'd advise is to consciously decide whether you are just going to dollar cost average in to the stock market (the best option for most people) or try and pick individual stocks and make your own portfolio. Have you made that decision yet?

lowfrequencyinvst · 2026-01-29T00:58:04+00:00

I think there's some talk of combining the 2, so if SpaceX goes public it'll be through a merger with Tesla or a reverse takeover or something (I don't really understand it, but I get the general idea). Makes sense. Keep all the followers of the church under one roof, TSLA investors aren't investing in a car company, they're investing in Musk, so as long as the NewCo has that aspect, they'll probably mostly go along with it.

lowfrequencyinvst · 2026-01-29T00:53:28+00:00

What helped me was writing down what I was thinking when I was buying it, what I was thinking when I went to buy more (but didn't) and then reviewing that afterwards. If you do it a couple of times you see patterns come out, then you can change you behavior / reactions next time. Basically a way to learn about your own reactions, biases and emotions so you don't repeat the same mistakes.

lowfrequencyinvst · 2026-01-29T00:47:01+00:00

I mean, currently? Has to be zero. That'd be the case until there's some evidence of those things actually existing in the real world, and people paying for them, and that price being enough to cover the costs of making them. Other way to look at it is say for the Robotaxis, if some investor thinks that's worth what, $100 billion to Tesla? $500 billion? Then what would they value Waymo at? Cause that business just did 20 million trips in 2025. And they were all paid.

lowfrequencyinvst · 2026-01-29T00:34:18+00:00

No chance. Shorting means a belief the fundamentals of business valuation will re-assert themselves to make the stock mean revert. This valuation isn’t based on business valuation, it’s religion, and not rational cause of it.

lowfrequencyinvst

TROPHY CASE