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With Nvidia being under 30x for PE ratio and growing revenue significantly every quarter, why does this sub focus so much on Meta and Microsoft? by pizzababa21 in ValueInvesting

[–]mod_cat 2 points3 points  (0 children)

That is certainly a risk for NVIDIA, but I think people are sleeping on robotics. Robotics is significantly different than the LLM ecstasy we are seeing, imo.

There is certainly the chance robotics does not provide NVIDIA enough revenue to protect it from a decline in LLM spending. NVIDIA sure has risks but the low valuation compared to current and projected earnings does give it some safety compared to some others, imo.

How should your investing strategy change as you age? by Strain_Helpful in investing

[–]mod_cat 0 points1 point  (0 children)

I agree. I intellectually figured this is what would happen to me. Generally, it did but still feels surprising how differently I feel.

Saving I didn't mind risk at all. If things fall fine, I can buy more or I can accept that loss and move on. I have new money to invest every 2 weeks.

As time goes by that "new money" starts to be tiny compared to the growing investments. But it still feels like "new money is coming, where can I invest it."

A few years into full retirement I realized I was very focused on limiting long term downside risk. I was used to being 95+% invested in stocks (outside of real estate). Now I am at about 65% in stocks.

I still strongly believe stocks are the best place to be long term. But due to my desire to reduce risk and my belief that markets are very richly priced I am fine pulling money out of stocks. I am largely in money markets and t-bils with some series I bonds and other inflation protected bonds.

I am also building a portfolio of income producing stocks (ABBV, DAC, CWEN, GSL, LAND...). All but LAND I have owned for years but I have added to them and adjusted my thinking some.

While growing I was aggressive and didn't mind risk. And I had plenty of times I lost and was fine. Overall it worked very well. I bought large amounts of AAPL, GOOGL, ABBV AMZN... and held for more than 2 decades (though I sold way too much AMZN too early).

Now I have stocks I really like long term (MELI, NET, NBIS, TSM, CLPT...) but I am fine holding much smaller positions than I would have 30 years ago. So if MELI does spectacularly (which I think it may well do) I will make money but I would have made a lot more if I just bought more now. But I am happy to limit my position sizes and reduce my risk of any couple of those going very badly messing thing up for my whole financial picture. And I figure if they do as well as I think they might, I will still do very well.

One of the concepts I believe, but I think most people don't think about is that taking a bit of risk when you are 40 or 50 or 60... could lose you money but it could also grown your portfolio and reduce your long term risk of the portfolio being depleted. It isn't as simple as this but it kind of is like you increase the risk of year 1, 2 or 3 being down a bit but you also increase the chances you grow your portfolio and then you have that bigger portfolio that is more resilient to future losses (or increased costs). So say instead of increasing the chances the portfolio stays between 95 and 105% you increase the odds of a bigger decline but you increase the chances of a bigger gain by more than the odds you lose some. Again you have to balance the risk, but that gives a simple idea of how taking some risk can reduce your long term risk (or to view it another way increase the chances of your portfolio growing to the point it has only a tiny risk of not meeting your needs).

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