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Afro_Vacancy

Afro_Vacancy

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RegenWaiting said:
More often than not, dips are there for a reason :p

Seriously though, if there was a (good)strategy focusing on a single best investment parameter,
it would probably be price-to-book, although opinions on this differ.
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The dip, from what I understand, is because Obama blocked a merger with Pfizer.
 
RegenWaiting

RegenWaiting

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macaroni said:
I think XRP and ETH are weakening BTC to the point where a BCH takeover can happen. BCH is superior in every way, and if BTC is weakened enough where the miners see better return mining BCH then the flip will happen, it is only a matter of time. I'd say BCH at $4k within 3 months, but could be sooner. This is my own assessment, and i have been wrong before.

I do think the small billion coins like XRP/XLM/ADA have to at some point consolidate since it is not sustainable to keep growing given their market cap. Will be interesting to see how that happens but it must at some point because you can have this many billion circulation coins getting pumped this hard.
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Thanks for your input.
 
JeanLucBB

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Especially for tech and pharma p/b is useless in isolation. In general p/e along with peg ratios are more commonly used. I don’t know anyone who specifically looks at p/b ratios on their own as meaningful, and to be honest without proper balance sheet analysis and reflection on earnings it’s not worth looking at. On the other hand p/e and peg ratios along with an understanding of business cycles and some macroeconomics alone on a % basis will allow outperformance.

As time goes on I see less and less reason to care about fundamentals exclusively even in the stock market and more reason to focus on understanding market sentiment and psychology along with technical analysis. The market herd tends to be more focused on short term earnings than anything else regardless of business cycle or simply hype for the case of tech companies. The idea that even most professional analysts bother to analyze the balance sheet is laughable if you read their reports and predictions. Too often I see mistakes recognized by stock forum members and only months later by the company and analysts.

RegenWaiting said:
More often than not, dips are there for a reason :p

Seriously though, if there was a (good)strategy focusing on a single best investment parameter,
it would probably be price-to-book, although opinions on this differ.
Click to expand...
 
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RegenWaiting

RegenWaiting

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JeanLucBB said:
Especially for tech and pharma p/b is useless in isolation. In general p/e along with peg ratios are more commonly used. I don’t know anyone who specifically looks at p/b ratios on their own as meaningful, and to be honest without proper balance sheet analysis and reflection on earnings it’s not worth looking at. On the other hand p/e and peg ratios along with an understanding of business cycles and some macroeconomics alone on a % basis will allow outperformance.

As time goes on I see less and less reason to care about fundamentals exclusively even in the stock market and more reason to focus on understanding market sentiment and psychology along with technical analysis. The market herd tends to be more focused on short term earnings than anything else regardless of business cycle or simply hype for the case of tech companies. The idea that even most professional analysts bother to analyze the balance sheet is laughable if you read their reports and predictions. Too often I see mistakes recognized by stock forum members and only months later by the company and analysts.
Click to expand...
Even though (all)history shows that the single best isolated performing factor is p/b, and that I'm
heavily biased towards longterm, rigid conservative and risk averse strategy, I was still alluding
to that one should look at other factors/ratios too, especially p/e like you mention...

Also, especially in some asset classes (like tech f.ex) p/b is useless. I mean, imagine if someone
looked at p/b for early netflix days, or even RaiBlocks for that matter. I guess I'm very oldschool,
having the DowJones hounds in the back of my mind :D
 
blackg

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RegenWaiting said:
Nobody can know for sure. All you can do at this point is guesstimate, but I'm a huge fan of
diversification and hedging in order to minimize the risk. I invest no more than I'm able to lose, and
a little more cap of my own money relative to coincap of total world fiat coin. This is because
I want this to happen :)
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A budget investor just like @JeanLucBB.
 
Afro_Vacancy

Afro_Vacancy

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We're all budget investors here. There are no Icahns or Thiels here.
 
Choi Han Kyul

Choi Han Kyul

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RegenWaiting said:
Hope it's true as I favor the coin personally.

Hey, do you happen to know the limit number of coins one
can store on a single ledger nano s (not talking about apps - delete an install them all the time) ?
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I think it’s 4 different types of coins at a time.

I have to purchase a physical wallet and thinking trezor.
@JeanLucBB Does Trezor has any limits on coin storage?
And it supports all the coins on mew?
Any consolidated list.
 
JeanLucBB

JeanLucBB

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RegenWaiting said:
Even though (all)history shows that the single best isolated performing factor is p/b, and that I'm
heavily biased towards longterm, rigid conservative and risk averse strategy, I was still alluding
to that one should look at other factors/ratios too, especially p/e like you mention...

Also, especially in some asset classes (like tech f.ex) p/b is useless. I mean, imagine if someone
looked at p/b for early netflix days, or even RaiBlocks for that matter. I guess I'm very oldschool,
having the DowJones hounds in the back of my mind :D
Click to expand...


Don't agree that it's the the single best performing ratio in isolation and quite frankly it doesn't make any sense because the ratio particularly for growth stocks and in various sectors like tech, biotech, pharma etc is completely useless in isolation. In my finance degree they emphasised that on its own that it's not particularly useful and the studies I've looked at all show PEG and P/E combo as more accurate and I don't know any investor who actually uses p/b seriously, but a lot who take PEG. Of course no investor is using just one in isolation though and will look at p/b, just not on its own.

https://link.springer.com/article/10.1023/A:1012050524545

"We also find that the P/E benchmark valuation method performs better than the P/B benchmark valuation method and the combined method outperforms either the P/E or the P/B method. These results imply that earnings are more important than book value as a single-number firm valuator over our sample years (from 1973 to 1992) and that both earnings and book values are value relevant, one does not substitute perfectly for the other."


https://www.investopedia.com/ask/an...better-metric-booktomarket-ratio-analysis.asp

"
The book-to-market ratio shows the relative premium an investor is presently willing to pay above the company's book value.

One problem with using book value is it is easily manipulated by accounting standards and subjective accounting decisions. Unless the investor is confident that two companies share similar accounting judgment, the book-to-market ratio can be unreliable compared to P/E."

Another reason reason why it isn't worthwhile as a single ratio for a noobie not looking at other factors

http://quantitativealpha.com/pb-ratio-as-a-strategy-not-as-good-as-others/

"During the analysed period of 1995 to 2016, we find that the quintile consisting of stocks with the lowest P/B just barely beats the universe of 1000 stocks with 1.42% margin per year and outperforms MSCI ACWI index by 2.37% per year. Investing in the cheapest stocks based on the lowest P/B does not give significant outperformance compared to investing in the highest P/B. In our study the spread between the lowest and the highest quintile is only 1.07%."

http://quantitativealpha.com/pe-ratio-as-a-strategy-undervalued-stocks-have-higher-returns/


During the analyzed period of 1995 to 2016, we find that the quintile consisting of stocks with the lowest P/E provides the highest returns. In twenty-one-year period the lowest P/E quintile yielded 11.61% per year, compared to analyzed universe of 1000 companies of global stocks which returned 7.55% a year and the highest P/E quintile with 4.83% returns. Investing in the cheapest stocks based on the lowest P/E beat the highest P/E stocks by a spread of 6.78%, almost double the returns.
 
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RegenWaiting

RegenWaiting

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JeanLucBB said:
Don't agree that it's the the single best performing ratio in isolation and quite frankly it doesn't make any sense because the ratio particularly for growth stocks and in various sectors like tech, biotech, pharma etc is completely useless in isolation. In my finance degree they emphasised that on its own that it's not particularly useful and the studies I've looked at all show PEG and P/E combo as more accurate and I don't know any investor who actually uses p/b seriously, but a lot who take PEG. Of course no investor is using just one in isolation though and will look at p/b, just not on its own.

https://link.springer.com/article/10.1023/A:1012050524545

"We also find that the P/E benchmark valuation method performs better than the P/B benchmark valuation method and the combined method outperforms either the P/E or the P/B method. These results imply that earnings are more important than book value as a single-number firm valuator over our sample years (from 1973 to 1992) and that both earnings and book values are value relevant, one does not substitute perfectly for the other."


https://www.investopedia.com/ask/an...better-metric-booktomarket-ratio-analysis.asp

"
The book-to-market ratio shows the relative premium an investor is presently willing to pay above the company's book value.

One problem with using book value is it is easily manipulated by accounting standards and subjective accounting decisions. Unless the investor is confident that two companies share similar accounting judgment, the book-to-market ratio can be unreliable compared to P/E."

Another reason reason why it isn't worthwhile as a single ratio for a noobie not looking at other factors

http://quantitativealpha.com/pb-ratio-as-a-strategy-not-as-good-as-others/

"During the analysed period of 1995 to 2016, we find that the quintile consisting of stocks with the lowest P/B just barely beats the universe of 1000 stocks with 1.42% margin per year and outperforms MSCI ACWI index by 2.37% per year. Investing in the cheapest stocks based on the lowest P/B does not give significant outperformance compared to investing in the highest P/B. In our study the spread between the lowest and the highest quintile is only 1.07%."

http://quantitativealpha.com/pe-ratio-as-a-strategy-undervalued-stocks-have-higher-returns/


During the analyzed period of 1995 to 2016, we find that the quintile consisting of stocks with the lowest P/E provides the highest returns. In twenty-one-year period the lowest P/E quintile yielded 11.61% per year, compared to analyzed universe of 1000 companies of global stocks which returned 7.55% a year and the highest P/E quintile with 4.83% returns. Investing in the cheapest stocks based on the lowest P/E beat the highest P/E stocks by a spread of 6.78%, almost double the returns.
Click to expand...
Great post!

I must admit; you put forward very strong and convincing arguments against p/b here. It's not
that I don't agree...I didn't make up the ''history yearly average of p/b'' that I wrote earlier, it's just
seems that my info is outdated and obviously you're right.

Good thing you can jump in and
correct me though - you may help Afro make better inv. decisions.

Btw, RaiBlocks (or should I say Nano) might do great things soonish.
 
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