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   Strategies & Market TrendsThe Art of Investing


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To: Sun Tzu who wrote (2118)8/26/2021 10:34:44 PM
From: rimshot
   of 3399
 
lower interest rates, in theory, are thought to help tech and growth names

XLK vs. SPY ratio plot is shown in this daily chart -

stockcharts.com

* the multi-month highs & lows for this ratio remain range bound

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To: rimshot who wrote (2127)8/26/2021 10:54:17 PM
From: Sun Tzu
   of 3399
 
Lower rates help growth stocks in 2 ways: They lower their funding costs and allow them to borrow money to grow, and they make their meager income attractive (or losses less unattractive) relative to bond yields,

But context is everything. The real difficulty in making macro bets is that there is usually two opposite outlooks that seem to be based on the same "evidence." For example, yields can also go down b/c money is fleeing the stocks and is desperate to find a place to go to and lands in the bond market.

Someone somewhere has an index of unprofitable (Nasdaq?) companies. I forgot the source. I think Liz Sonders twitted about it. That index has been absolutely crushed even as the rates have been falling.

Overall, I agree with you that stocks that can show growth will do well in low interest environment - most of the time.

=============

BTW, did you see what happened to ADSK? I don't get it. I've read the usual stories and they don't hold water. I didn't listen to the call. If there was something in there, nobody is writing about it yet.

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To: Sun Tzu who wrote (2128)8/26/2021 11:00:53 PM
From: Lee Lichterman III
   of 3399
 
ADSK disappointed on outlook
marketwatch.com

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To: Lee Lichterman III who wrote (2129)8/26/2021 11:05:32 PM
From: Sun Tzu
   of 3399
 
I know that is what the media claims. But here's what ADSK actually said (from the article that you linked):

Autodesk said it expected third-quarter non-GAAP per-share earnings of $1.22 to $1.28 on revenue of $1.11 billion to $1.13 billion; analysts modeled adjusted earnings of $1.30 a share on revenue of $1.12 billion.

The company said it now expects full-year non-GAAP earnings of $4.91 to $5.06 a share on revenue of $4.35 billion to $4.39 billion. Analysts had expected full-yearn non-GAAP earnings of $4.86 a share on revenue of $4.36 billion.


That doesn't sound disappointing to me. And even if they don't make the top range, it still doesn't justify a 10% drop. Some analyst or hedge fund somewhere is thinking something that is not shared with the rest of us.

EDIT - And BTW, ADSK could be considered an infrastructure company b/c all those infrastructure projects are bound to increase demand for their products.

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To: Sun Tzu who wrote (2130)8/26/2021 11:14:31 PM
From: Lee Lichterman III
   of 3399
 
I don't follow it so don't know much about it. I see a stock that has climbed 50% year over year with a 50+ PE on 11% Revenue growth. I don't know how they're getting more earnings than revenue. Sharp pencils???

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To: Lee Lichterman III who wrote (2131)8/26/2021 11:17:36 PM
From: Sun Tzu
   of 3399
 
I will have to dig in. The stock was not too far above its 3 year regression line. So I don't know. You would think that with all the infrastructure spending, demand for their products is going to increase. I will dig deeper when I have some free time.

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From: Sun Tzu8/27/2021 8:10:11 AM
   of 3399
 
Why is there a chip shortage? Unintended consequences meeting fab upgrades to 300mm wafers

Koray Köse, an analyst at Gartner, says that among the pressures facing the chip industry prior to the pandemic were the rise of 5G, which increased demand, and the decision by the US to prevent the sale of semiconductors and other technology to Huawei. Chip makers outside the US were quickly flooded with orders from the Chinese firm.

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From: Sun Tzu8/27/2021 9:15:34 AM
   of 3399
 
So the inflation comes in well above expectations (both revised and current) and the yields drop and the futures rise.

Let's see how the day shapes up.

PS the poll closes today Message 33454507

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To: rimshot who wrote (2127)8/27/2021 10:25:14 AM
From: Sun Tzu
1 Recommendation   of 3399
 
Any plans for a sell off should be shelved for now.

Risk On

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To: Sun Tzu who wrote (2036)8/27/2021 12:25:35 PM
From: Sun Tzu
   of 3399
 
AM is up 20% since this purchase a week ago.
EPD is doing well too, though not as much.

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