There’s No Bubble In Stocks

No, this isn’t 1999 — or February of 2000.
It’s not middle of 2008 either, when Countrywide’s “Tan Man” was making nearly-daily parade appearances on Communist News Bull **** proclaiming how he was going to “take share” from collapsing subprime lenders, pumping his share price. The company subsequently collapsed in a smoking heap.
I know, I know, stocks are cheap. I just had someone run that crap on me with Micron in the bar last night, pointing to their TTM earnings P/E and “forward estimates.” He of course ignored the ~400% price rise in the last 18 months or so, the rather-high price:sales ratio and the proved, 20+ year cylical nature of the DRAM and NAND chip sector, along with the fact that they’re in a commodity products business which means that as soon as you start getting >10% pretax margins (which Micron is achieving at present) someone will come shooting at you — because you have no “moat” and they can.
I wished him the best of luck in buying it at $45.

This post was published at Market-Ticker on 2017-12-21.

 

Leave a Reply

Your email address will not be published. Required fields are marked *