February Market Insights

feb 21 market insights

Old vs New: Chevron or Zoom?

feb insights

Imagine you had two investment opportunities: you can buy a company that sells for 15 times last year’s cash flow, or another that sells for 3,100 times. What if I told you the former’s stock price is down 25% since mid 2019 while the latter is up almost 800%? By the way, next year’s cash flow is expected to increase substantially for both of these companies.

You can choose between two stocks, and they are #Chevron (CVX) or #zoomvideocommunications (ZM). #warrenbuffet Vs #Chamath. #oldtech vs #newtechnology. Don Vs. Hunter. Investing is not about debating; it is about your capital! The return ON capital and the return OF capital.

There are many ways to skin a cat (sorry #PETA, it is just an expression) but as an investor, one’s focus should be on this simple question…how much of the future’s profits are baked into today’s quotation? The #OracleofOmaha chose CVX, but which one would you choose?

Tech Giants: Where did they start?

feb insights 2

Charted below are the respective Market Capitalizations of both Amazon and Apple in February 2002, the same month when Tom Brady won his first Super Bowl.

Tesla and its place in the S&P 500

feb insights 3

Tesla has now given up all 2021 YTD gains, while their weighting in the S&P 500 is 1.65%, less than when they were added to the S&P 500. This Bloomberg screenshot also shows a Bitcoin (USD) overlay in orange, with Elon Musk and Tesla disclosing their Bitcoin holding only 2 weeks ago. If Tesla’s share price were to fall to the mid 400s, it would then represent approximately 1% of the S&P 500.