***Official*** 2011 Stock Market Thread

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IHateMyJob2004

IHateMyJob2004

Lifer
Sep 29, 2004
18,656
68
91
Yoxxy said:
The buyers of JNJ aren't there yet in the cycle. Wait a bit. Hard to buy a name that has -17% relative performance to its benchmark (Russell Top 200 Value) on a 52-week basis.

There are plenty of mutual funds, pensions, spx indexed that need to own the name and it still isn't going anywhere. Watch it, don't buy it.
Click to expand...

Relative performance. That is something value investors care about in terms of portfolio performance, not individual stock performance. A true value investor would see that as a reason to buy, not be in fear. People that don't buy due to "bad" relative performance are not aware of the cognative biases they suffer from.

I simply watch JNJ FCF numbers go up year after year. If the stock doesn't move it is just getting more undervalued. I get excited watching the stock go no where. It just allows me to buy more over time.

As for JNJ, I went and revisited last night. I don't see how it is not an $80 stock. And $80 is assuming only slightly better than inflationary growth over the next 5 years, followed by inflationary growth only. $100 is a more realistic painting of value.

As for options, doing something at the 40 strike on JNJ out to Jan 2013 is safer indeed with enhanced results as a possibility.

As for "cycles", are you saying that you should buy after a stock runs up and not prior to? So, on a 17% run up of JNJ from $61 to $72, you should then buy? Why not just buy at $61, collect a 4% yield and wait 2 years for JNJ to go up to $72? And once it hits $72, it already has "cycle momentum" so you'll make a killing.
 
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IHateMyJob2004

IHateMyJob2004

Lifer
Sep 29, 2004
18,656
68
91
Yoxxy said:
Penny stocks are ILLIQUID. 450 shares may move the whole float for the day, go to my point on stock that is held away. Someone is going to trade the bid ask on a penny stock. This is an irrelevant comparison. There are 1000 to 10,000's of providers of liquidity in JNJ. You do need significant money to come into JNJ. JNJ has only 284M closely held shares of 2.746B. There is plenty of float to move, it is not a penny stock.
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Theory: For a stock to go up $X in market cap, $X needs to be put into the stock.

Theory's only need to be disproven once for them to be failed.

Your hypothesis doesn't hold water. It's much like the efficient market hypothesis. That should not be tought in finance, it should be tought in history class.

You did get me on the 13F. I went and looked at the gurus holding each stock at gurufocus.com. Based on that, "better" investment managers are more likely to own JNJ than AAPL. Many gurus avoid AAPL simply because the future of a quickly evolving company is hard to predict. To value a company the Warren Buffett way, one needs to be able to project with reasonable safety the future free cash flows for the next 20 years. I doubt anyone could do that with AAPL for just 10 years. JNJ and AAPL are not apples to apples. JNJ will be much like it is today in 10 years time. AAPL though could be where it was 10 years ago.
 
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T

The-Noid

Diamond Member
Nov 16, 2005
3,117
4
76
IHateMyJob2004 said:
Relative performance. That is something value investors care about in terms of portfolio performance, not individual stock performance. A true value investor would see that as a reason to buy, not be in fear. People that don't buy due to "bad" relative performance are not aware of the cognative biases they suffer from.

I simply watch JNJ FCF numbers go up year after year. If the stock doesn't move it is just getting more undervalued. I get excited watching the stock go no where. It just allows me to buy more over time.

As for JNJ, I went and revisited last night. I don't see how it is not an $80 stock. And $80 is assuming only slightly better than inflationary growth over the next 5 years, followed by inflationary growth only. $100 is a more realistic painting of value.

As for options, doing something at the 40 strike on JNJ out to Jan 2013 is safer indeed with enhanced results as a possibility.

As for "cycles", are you saying that you should buy after a stock runs up and not prior to? So, on a 17% run up of JNJ from $61 to $72, you should then buy? Why not just buy at $61, collect a 4% yield and wait 2 years for JNJ to go up to $72? And once it hits $72, it already has "cycle momentum" so you'll make a killing.
Click to expand...

xxx
 
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T

The-Noid

Diamond Member
Nov 16, 2005
3,117
4
76
IHateMyJob2004 said:
Theory: For a stock to go up $X in market cap, $X needs to be put into the stock.

Theory's only need to be disproven once for them to be failed.

Your hypothesis doesn't hold water. It's much like the efficient market hypothesis. That should not be tought in finance, it should be tought in history class.

You did get me on the 13F. I went and looked at the gurus holding each stock at gurufocus.com. Based on that, "better" investment managers are more likely to own JNJ than AAPL. Many gurus avoid AAPL simply because the future of a quickly evolving company is hard to predict. To value a company the Warren Buffett way, one needs to be able to project with reasonable safety the future free cash flows for the next 20 years. I doubt anyone could do that with AAPL for just 10 years. JNJ and AAPL are not apples to apples. JNJ will be much like it is today in 10 years time. AAPL though could be where it was 10 years ago.
Click to expand...

xxx
 
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J

JS80

Lifer
Oct 24, 2005
26,271
7
81
Yoxxy said:
I would like to see it move above 17.90 and get out of the range before I would be a buyer. Uptrend from mid-July like many other stocks still intact, but as I said I would like to see a higher high before I would jump in. Gigantic short interest should break if you did get a higher high take the ride and sell.
Click to expand...

Thanks.

Do you follow LVS?
 
T

thepd7

Diamond Member
Jan 2, 2005
9,423
0
0
Yoxxy, have you ever looked at NATI? How about WFR?

With Ford's earnings today, do you feel like it's a good buy?
 
T

The-Noid

Diamond Member
Nov 16, 2005
3,117
4
76
Nasdaq OMX Group Inc. (NDAQ) experienced an issue disseminating its U.S.-based indexes Friday that prevented market participants from being able to view key market measures including the Nasdaq Composite and the Nasdaq 100. Further details on the issue were not immediately available, said a representative from Nasdaq's Global Data Products unit. He noted the issue was affecting Nasdaq's U.S.-based indexes including its PHLX indexes--which include a number of sector-based indexes--but that global indexes were unaffected. "We don't know anything further yet but they're looking into it," the representative said.

.NCOMP still says 0 and not open on my term. Kind of sucks because I wanted to see how much AMZN was going to affect it.

NQ/1 down -1.
 
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