Investing Thread

[JWags85]

I generally agree, but the current market is not at all about fundamentals, or promise, it's about vibe. The vibe is strong with SpaceX so if you can get in on the IPO (a friend is able) you will make big money, and can dump before the Vibe wears off if you want.

I don't really disagree about vibe trading.  But I would caveat that with the fact that it's been that way for a solid decade plus.  Well before whatever you feel this administrations impact was on the market, and well before peak Musk-related polarization (though Tesla was one of the bannerman stocks for that market performance evolution).

 The pre-profit (and then even more wild, pre-revenue) valuations for tech companies that could scale quickly, mostly due to no large scale manufacturing needs, changed the way future earnings were projected, made math way fuzzier, and opened up a lot of room for the "VIBES" cause you could project user growth so many different ways and metrics that were being altered on the fly.  That then expanded to almost any company pushing into a new realm of tech or market opened up by tech, even if manufacturing was needed.  So you saw it start to happen to semis, battery tech, etc...

Around the same time (arguably 4-5 years earlier), you saw a profound shift in how quarterly earnings were evaluated. Actual earnings beats or misses were less important than guidance.  You'd see a company post great earnings but have a tepid or negative stock price response due to weak guidance moving forward, or vice versa.  While it's not as nebulous as projecting huge growth on potential vaporware for companies losing money quarter after quarter, it's still basing stock/market sentiment on growth optimism, generous projections, and, some would say, VIBES, as opposed to hard numerical metrics and data that was always the traditional method.

It's obviously not uniformly bad or broken across the board, but like every tradable market going back hundreds of years, trends or herd behavior gets out of control and things get very out of whack.

As for SpaceX, I was very much speaking to buying post-IPO.  If you can still get in pre-IPO, there is definitely upside to be had, especially given the buzz and hype.  How much does definitely depend on what the final offering valuation is

[MU82]

I have been investing long enough to know that it is stupid to try to call a top in the market, but in my 34th year as a professional investor, I am having a scary déjà vu back to the good old days of 1999. ...

Our economy is increasingly becoming a one-trick pony, fueled predominantly by the AI capital spending cycle, while the bottom 90% of American households are starting to buckle under price increases and a downturn in real income. Auto delinquency rates are at a record high, and credit card delinquencies are rapidly approaching one. For now, the top 10% of households combined with the AI capex cycle are keeping the economic expansion alive, but it is a weak foundation at this stage of the business cycle. ...

There is also the issue of higher interest rates, which accompany a rising inflation rate, as well as growing federal budget deficits and debt. If there is one thing that can rapidly extinguish excessive valuations in speculative, momentum-driven stocks, it is a rising discount rate. This may not happen today, next week, or this year, but eventually it will happen. It is impossible to know when, which is why I intend to continue gradually reducing risk as the major market indexes melt up.

https://seekingalpha.com/article/4909144-i-am-having-a-1999-deja-vu?

FWIW, this writer is generally bullish on the market, often arguing with bears that they are too negative.

[MuggsyB]

Who bought ASTC this morning and sold it after the bell?

[NCMUFan]

https://www.forbes.com/sites/donmuir/2026/02/04/300-billion-evaporated-the-saaspocalypse-has-begun/

[TSmith34, Inc.]

The Stock Market Is at a 40-to-1 CAPE Ratio Seen Only Twice Before. 1929 and 1999 Preceded Crashes.
https://finance.yahoo.com/markets/stocks/articles/stock-market-40-1-cape-113349287.html

But this time it's different!

[MU82]

The Stock Market Is at a 40-to-1 CAPE Ratio Seen Only Twice Before. 1929 and 1999 Preceded Crashes.
https://finance.yahoo.com/markets/stocks/articles/stock-market-40-1-cape-113349287.html

But this time it's different!

I'm about halfway through Andrew Ross Sorkin's new(ish) book, "1929." It's a fascinating read, and it reminds me so much of what's going on right now.

[TSmith34, Inc.]

I'm about halfway through Andrew Ross Sorkin's new(ish) book, "1929." It's a fascinating read, and it reminds me so much of what's going on right now.

Have you made any adjustments to your holdings?

My cash position has actually gone down due to added investments in HASI and a few more nibbles at various BDCs in order to increase cash flow. I'm trying to figure out what else to sell to raise more cash.

[MU82]

Have you made any adjustments to your holdings?

My cash position has actually gone down due to added investments in HASI and a few more nibbles at various BDCs in order to increase cash flow. I'm trying to figure out what else to sell to raise more cash.

Not really. I'm a boring, buy-and-holdish investor who does little trading and who has a pretty substantial cash position. It's been that way for a little while now.

[TSmith34, Inc.]

Anyone a SpaceX buyer after all the financial reporting this week? Not impressive numbers, total growth story. I dunno, maybe throw some money at it just in case kind of play?

Buyer beware

https://www.profgmedia.com/p/spacex-stasy

"Once you arrive at the financials you start to realize what the language is overcompensating for: awful numbers. The company generated $4.7 billion in Q1 2026, up only 15% from the year before (very low for an "AI company"). It also lost $4.3 billion, up 700% from the year before. That means the company is spending roughly twice as much as it makes (and on pace to explode those losses even more), while growing its topline six times slower than Nvidia and two times slower than my own podcast. There's no getting around it — these numbers are terrible.

But it gets worse when you compare those numbers to last year's. Revenue grew 33% in 2025, meaning the business has actually started to decelerate. Meanwhile net losses came in at $4.9 billion, so the company is on track to lose four times more money than it did last year. I'll put it simply: slowing revenue + skyrocketing expenses = not good.

Pricing Problems
I'd have no problem with SpaceX's sh*tty financials if they were reflected in the valuation — but they're not. The stock is set to be priced at 107 times sales, which would make it one of the most expensive stocks in history. (The most expensive stock in the S&P 500 is Palantir, which trades at 64 times sales). It will be twice as valuable than Walmart while generating less revenue than Macy's.

Maybe this is just the nature of blockbuster IPOs? No. Compared to previous go-publics, SpaceX's valuation falls nothing short of insane. Meta went public at 28 times sales with 88% revenue growth. Google went public at 10 times sales with 234% growth. Put another way, SpaceX is growing seven times slower while asking for a multiple ten times higher. Pass me the crack pipe."

[MU82]

Don't worry, folks. CEOs are doing OK ...

Median pay for CEOs rose nearly 6% in 2025, but some compensation packages were eye-popping

The typical CEO compensation package rose nearly 6% in 2025 to $17.7 million, as company boards rewarded their top executives for bigger profits and higher stock prices, and gave them incentives to stick around and make even more money for shareholders. At half the companies in AP's survey, it would take the worker at the middle of the company's pay scale 200 years to make what the CEO did in one, up from 192 years in last year's survey.

[MU82]

DELL soared 35% just after open, and it's still up 30% as I write this.

The company was granted a $9.7 billion Pentagon contract ... shortly after the guy in the White House bought millions of dollars worth of DELL stock. He has been repeatedly praising the company in public, at one point telling supporters at a rally to "Go out and buy a Dell computer."