The Market Thread

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Nov 6, 2010
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So can anyone tell me why Intel is so out of favor? Seems all the takes I hear are negative, but their numbers are so strong. I bought a few more shares today, and may buy more soon. I get that there may not be a ton of growth potential, but so what. To get a value stock like that at 10X PE, in that segment, I don't get the gloom.
 

jobob85

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What's it gonna take to get more comments on this thread??? Was my favorite one over here, but it's turned to crickets....
When the markets are bumpy, everyone hides.

I have been hedging towards safety and also not reinvesting dividends and capital gains from my retirement mutual funds. Keeping some dry powder for when the fed starts moving rates.
 
Nov 6, 2010
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When the markets are bumpy, everyone hides.

I have been hedging towards safety and also not reinvesting dividends and capital gains from my retirement mutual funds. Keeping some dry powder for when the fed starts moving rates.
I would think that's already priced in.
 

Bowers2

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What's it gonna take to get more comments on this thread??? Was my favorite one over here, but it's turned to crickets....
I've beat the S&P 500 one-year return. So that's good. I've noticed I'm pretty blue chip/tech/energy heavy, though. I think that needs to change going forward.
 

jobob85

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I would think that's already priced in.
It's priced in until it happens. If, and I expect something close, the fed goes for a full point over the next year the market will probably end up lower than where it is now. It's not necessarily a bad thing as long as it's not a major correction (greater than 20%). Just my 2 cents. I plan to get to about 25 - 30% in cash to hedge against a correction.
 

steross

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Mar 31, 2004
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I would think that's already priced in.
All that has happened is talk. The Fed hasn't raised anything yet.

The past few times the Fed upped rates the market kept climbing along with it then turned south about the time of the recessions.

But, we are far more Fed dependent in this go around rather than economic growth dependent. The market might react to Fed actions sooner than in the past.

(look at 2000 to 2022- we ain't seen even a tiny rate increase yet.)
Screen Shot 2022-01-11 at 8.18.24 PM.png
 
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steross

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The other thing to look at is Fed asset purchases. This is a graph of the S&P 500 in red and Fed asset purchases in blue.
Note in 2012-13 the S&P was stalled then purchases picked up and it rose 2013-15. 2015-17 purchases stalled and the S&P consolidated.
The S&P rose in 2017 without purchase, probably Trump-related. But, it again stalled as the Fed started selling. PRIOR to COVID the Fed started purchases again and the market climbed into 2020.
The COVID plunge hit and the FED made HUGE purchases and the narrowest "V" bear in history occurred. The Fed has continued to purchase at a high clip and the market has liked it.

They say they are going to stop. This would at best mean some years of market consolidation here but if they really back off then we could take a dive.
Screen Shot 2022-01-11 at 8.23.37 PM.png
 
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bleedinorange

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Close, very close
I bought late last week. I looked at companies that were actually making money and picked up Cisco, Microsoft, and added some more Apple. I sold (took my cost basis out) of several stocks to increase my cash position to 20% as well.
 

osupsycho

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I bought late last week. I looked at companies that were actually making money and picked up Cisco, Microsoft, and added some more Apple. I sold (took my cost basis out) of several stocks to increase my cash position to 20% as well.
I would stay away from Cisco. The way they are “showing” a profit is through 10% layoffs and restructuring. They are getting left behind in the tech world with software defined networking taking hold now.
 
Nov 6, 2010
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I bought late last week. I looked at companies that were actually making money and picked up Cisco, Microsoft, and added some more Apple. I sold (took my cost basis out) of several stocks to increase my cash position to 20% as well.
That's why I keep adding Intel. I just have a hard time finding too much negative in these numbers:

Valuation (MRQ)
Price/Earnings (TTM)10.82xPrice/Sales (TTM)2.88xPrice/Book2.52xPrice/Cash Flow5.76x
INTC's P/E Ratio is lower than 80% of other companies in the Semiconductors industry. This typically means that investors are willing to pay less for its level of earnings relative to future growth.
Profitability (TTM)
Gross Margin56.27%Operating Margin25.93%EBITDA Margin44.82%Net Profit Margin26.89%
INTC's Gross Margin is more than 76% of other companies in the Semiconductors industry, which means it has more cash to spend on business operations as compared to its peers. As indicated by the Operating Margin, INTC controls its costs and expenses better than 90% of its peers.
 

jobob85

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That's why I keep adding Intel. I just have a hard time finding too much negative in these numbers:

Valuation (MRQ)
Price/Earnings (TTM)10.82xPrice/Sales (TTM)2.88xPrice/Book2.52xPrice/Cash Flow5.76x
INTC's P/E Ratio is lower than 80% of other companies in the Semiconductors industry. This typically means that investors are willing to pay less for its level of earnings relative to future growth.
Profitability (TTM)
Gross Margin56.27%Operating Margin25.93%EBITDA Margin44.82%Net Profit Margin26.89%
INTC's Gross Margin is more than 76% of other companies in the Semiconductors industry, which means it has more cash to spend on business operations as compared to its peers. As indicated by the Operating Margin, INTC controls its costs and expenses better than 90% of its peers.
Intel's stock price is based on it's stagnant revenue growth. That lack of growth stems from poor choices dating back 10 years. Not to say it's a bad investment, in fact if the new 20 billion commitment to foundry services pays off they will look like a very undervalued stock in a couple of years.