Useless Conversation

[ghost]

Potential growth. The stock may be precisely valued at that point in time, but the dividends and future cash flows of the company will continue to produce investor returns.

Yes, but undervalued stocks are the ones that are most likely to experience growth.

And yes, I understand dividends are a reason.  I was thinking more about growth stocks.

[Paelos]

Let me emphasize my point. You need to buy on actual reasoning and not just because you think the stock is undervalued.

Granted if you have a financial background, are able to sift through financial statements, make appropriate PV and FCF decisions, and generally research the inner workings of the company in the future, you may KNOW the stock is undervalued. It's either undervalued or it's not, and the reason it may or may not be that way is because there are stupid people in the market.

Thinking the stock is undervalued is similar to guessing in my world. It's not about guessing where it will be in six months. It's about looking at the information today and assessing value today.

[ghost]

Dude, wherever did I say "go in and buy whatthefuckever just because the stock market is down?".  You have to do your research on any stock.  Nothing is guaranteed, we all know that about the stock market.  And undervalued is a subjective term in a lot of ways.  There is some "I think that stock is undervalued" to every professional opinion on the matter, no matter how much you want to go in and do fundamentals. 

[Paelos]

Absolutely the term "undervalued" is subjective. That was sort of my point. For the most part, people guess at it, and it's a terrible reason to buy a stock.

Stocks are never undervalued due to growth though. They are undervalued if their price today doesn't reflect their previous performance. That's usually rare.

[ghost]

Absolutely the term "undervalued" is subjective. That was sort of my point. For the most part, people guess at it, and it's a terrible reason to buy a stock.

Stocks are never undervalued due to growth though. They are undervalued if their price today doesn't reflect their previous performance. That's usually rare.

I wasn't catching that this was the point you were trying to make.  The point I thought you were making was that unless you can go through the balance sheets and financial statements with a fine tooth comb that you can't know whether or not a stock is undervalued or not.  And that's not true because even that won't tell you for sure.  The stock market is a gamble.  It's like reading the horse track program.  I still think you can look at certain financials and feel fairly confident buying after a day that has a big loss.  That's usually when I get into the stock market and it has served me well over time.  It's better than buying after a big gain, because then it's too late.   

[Abagadro]

Stocks are never undervalued due to growth though. They are undervalued if their price today doesn't reflect their previous performance. That's usually rare.

This isn't really true. Future projected earnings are built into stock prices. If you think that those earnings are going to be higher than projected  or that the overall market has dragged it down too far in relation to projected earnings then it is undervalued in your opinion (and every "value" other than straight book or cash values are opinions).  Individual companies get dragged down in larger market moves all the time and make them good buys.

[Nebu]

This isn't really true. Future projected earnings are built into stock prices. If you think that those earnings are going to be higher than projected  or that the overall market has dragged it down too far in relation to projected earnings then it is undervalued in your opinion (and every "value" other than straight book or cash values are opinions).  Individual companies get dragged down in larger market moves all the time and make them good buys.

On a related note: Is it even possible to know the true state of a company without being privy to the inner workings of that company?   

[Abagadro]

Depends on whether you believe their filings like their 8-K and 10-Q.  They are supposed to disclose most material info.

Inside info isn't supposed to even be used to trade stocks but it happens all the time. There is a fairly famous case where Barry Switzer was sitting watching a high-school game and two dudes were talking about inside stuff about a company. He eavesdropped and make a bunch of money based upon the info. Court ruled that it wasn't a violation of the law because he wasn't a fiduciary of the company.

[ghost]

As complex (and I would assume unethical) as the accounting is in a lot of these billion dollar companies I would assume that there is no way to know the true state of most of them.  Even if you are privy to the inner workings.

[Paelos]

Stocks are never undervalued due to growth though. They are undervalued if their price today doesn't reflect their previous performance. That's usually rare.

This isn't really true. Future projected earnings are built into stock prices. If you think that those earnings are going to be higher than projected  or that the overall market has dragged it down too far in relation to projected earnings then it is undervalued in your opinion (and every "value" other than straight book or cash values are opinions).  Individual companies get dragged down in larger market moves all the time and make them good buys.

It's an assumption that they are built in based on previous performance indicating future growth. There's no way to measure that. It's the accountant v. financial analyst debate. I fall on the accountant side obviously.

[Lantyssa]

I'm dying, Squirtle.

Day three of the flu, each worse than the one before it.  At least my nose stopped draining, and if I don't move too much, I'm not that sore.  Twelve hours of sleep was nice.

[rattran]

I ripped (almost) all of the circa 1920's radiators out of my house yesterday. Now it feels like someone beat my back and shoulders with a baseball bat. I'm going to try this 'arnica gel' hippie stuff I was given, see if it helps.

Flu sucks, I suggest plenty of warm blankets, cats, bad tv, and jagermeister.

[Lantyssa]

Flu sucks, I suggest plenty of warm blankets, cats, bad tv, and jagermeister.

Replace those with computer games and Mexican Coke and that's what I'm doing.

Just hope I'm ready to go by Monday.  Shitty timing, seeing as last week was my first at the new job.

[Salamok]

I ripped (almost) all of the circa 1920's radiators out of my house yesterday. Now it feels like someone beat my back and shoulders with a baseball bat. I'm going to try this 'arnica gel' hippie stuff I was given, see if it helps.

The icy hot bandages rock, just don't od on them.

[Yegolev]

He eavesdropped and make a bunch of money based upon the info. Court ruled that it wasn't a violation of the law because he wasn't a fiduciary of the company.

Certainly this is legit, since the info ceased to be "inside" when it was "distributed" in a public place.  Entirely different from, say, (legitimately) reading internal data and then purchasing/selling some stock based on it.

[ghost]

Flying with small children is fun.

[Merusk]

I've got a conspiracy theory for y'all.

Today I was told: "I worked at Wal*mart doing stockroom stuff while going to college.  At that time the Pepsi and Coke delivery drivers said that a few years back the heads of both companies had gotten together and decided their product should be the same price as Miller, Budweiser, etc.  They're a beverage after all.  That's why if you've tracked prices of soda over the last few years it's skyrocketed, like gas.  They're doing it slowly but just wait and see. You can't get a 24-pack for less than $8 now, it'll be $12 within 3 years. "

    

[Nebu]

I hope that is true.  Anything to help in the war against obesity. 

[MuffinMan]

The price of soda has certainly gone up but I wouln't call it "skyrocketing." I think the fast food industry would push back hard on anything like that.

[Merusk]

Well the FF industry makes a ton with each soda sold as it is.  Something ridiculous like 80-90% of the consumer cost is profit. 

But yeah, I chuckled.

[Fraeg]

Flu sucks, I suggest plenty of warm blankets, cats, bad tv, and jagermeister.

Replace those with computer games and Mexican Coke and that's what I'm doing.

Just hope I'm ready to go by Monday.  Shitty timing, seeing as last week was my first at the new job.

just scrolled down the page and read that bit about Mexican Coke and the first thing that came to me was "dear god why is someone announcing that they are snorting  Coke and playing video games".  My next thought was "is Mexican Cocaine supposed to be really good?"

[Chimpy]

Fraeg, you are like the only other person on this board that sees people writing Mexican Coke and think of white powder not brown liquid.

[Furiously]

Columbian coke is where it is.

[Pennilenko]

Columbian coke is where it is.

Is that made with real sugar too?

[Minvaren]

The ethanol thing has driven the cost of corn up, so corn syrup would go up as well.  Would that it went up enough to get sugar back in all soft drinks...

But when a 32oz soda is nearly the same price as a 32oz beer at the corner store, methinks that soft drink makers are enjoying their moneyhats a bit too much.

[Chimpy]

Columbian coke is where it is.

Is that made with real sugar too?

Powdered sugar.

[Yegolev]

Soda, like most luxury items, sells for what people will pay.

[Merusk]

Well there's confirmation from the inside man!

 

[Strazos]

Soda, like most luxury items, sells for what people will pay.

What? My television keeps telling me that soda is an essential item and shouldn't be taxed!

God, I hate the proliferation of industry-driven commercials.

[Cyrrex]

The problem I have with the cheap soda theory is that soda still appears to cost roughly the same as it did in 1972.  I might be exaggerating slightly, but still....soda is fucking dirt cheap. 

[Murgos]

I've got a conspiracy theory for y'all.

Today I was told: "I worked at Wal*mart doing stockroom stuff while going to college.  At that time the Pepsi and Coke delivery drivers said that a few years back the heads of both companies had gotten together and decided their product should be the same price as Miller, Budweiser, etc.  They're a beverage after all.  That's why if you've tracked prices of soda over the last few years it's skyrocketed, like gas.  They're doing it slowly but just wait and see. You can't get a 24-pack for less than $8 now, it'll be $12 within 3 years. "

    

Right, two companies with who knows how many levels between the top brass and the local distributors delivery people and it's the delivery people who are in the know as to long term strategic planning?

I found your answer.

[Bunk]

Summation of responses to this page:

Flu sucks, always seems to hit when under stress (like starting a new job), hope you feel better.

Only thing worse than flying with kids, is sitting behind the guy flying with kids, because then I don't even have the right to pummel them.

Paid $2.49 for a mediumish fountain coke at a fast food place last night. Could have bought 2 litres in the store for that.

Call me back and complain about beer prices when you are paying over $11 per sixpack. Same goes for gas at $5.40 a gallon.

Why oh why did I wake up two hours after going to bed last night for no discernable reason?

[Sky]

I hope that is true.  Anything to help in the war against obesity. 

Diet Coke 

The cost of a 12-pack of soda has doubled in the last five years here. $6/12 pack, which is more than I was paying at a vending machine a few years ago. When Coke products go on sale, I buy the maximum allowable amount every day. Because Pepsico's distributor has our region sewn up tight. Pepsi products are on sale almost every week and in almost every restaurant (I can't think of one with TCCC products outside fast food chains). Coke products go on sale about every six weeks, and you have to hope it's a decent sale (the current 3 12 packs for $11 is meh...it was 4 for $10 two months ago, which was the last sale).

[Nebu]

Diet Coke 

I feel ya.  I'm a hardcore Diet Coke junkie.  At almost $8 a 24 pack, I'm finally finding the will to give the stuff up forever.  I'm just waiting for a long weekend so I can endure the caffeine withdrawal. 

[Mrbloodworth]

Soft drinks will kill you.