Great post Brian. Rather than indicting the business, you explained that the business is perfectly solid, but even if things continue to go well, it's overvalued even compared to similar tech stocks. A calm and well put together argument. Kudos.
This is getting boring same old narrative. It's been overvalued at 20 billion and has consistently overvalued....zzzz... to compare with other companies' historical valuation multiple shows that you know nothing about PLTR. never evolved, always backward looking, using traditional lens to view PLTR, the only certainty is that you haters will continue to underperform for a very long time
I have a mate whose bragging about his twenty bagger in this. Mind you, he’s sold 4 times on the way up and holds less than 10% of his original investment in it. I don’t think he can claim genuine 20 bagger status with that 😂. I’ve said to him a twenty bagger should almost be life changing, and certainly portfolio changing. Different mindsets.
There is so much FIAT in the system is has to go somewhere. While ever Presidents and Central banks set the news cycle valuation of returns on stock value are perceived to be more important then the business itself.
Look at Bitcoin. It has achieved very little real benefit to society. It is the promise that keeps it rising.
The west has lost its mind. Completely unreasonable when it comes to implementing a strong economy based on the dictionary definition of strong economy.
An ever rising stock market is not evidence of strong economy.
That’s why I sold at $158. No, I didn’t hold from 7 and it didn’t make me rich. I bought from time to time and I love the stock. But there’s plenty fish in the water and these multiples are smth out of order
Great piece and could not agree more. There is another dynamic here that is difficult to quantify but really critical: tax. This affects many stocks today, not just these ridiculous expensive names. (Apple as a non-grower trading where it does makes little sense). The problem is there is a lot of what I will call ‘locked-up’ shares in many names. 75 year old clients, Trust accounts (where cap gains particularly onerous)- to name a couple- are situations where taking massive gains is a significant decision and not always an easy one. Here is some math: A 75yo NYC resident bought PLTR at $25. At $150 they’d like to sell. That would trigger a cap gain of $125. All in-Fed, State/Local, surcharge- call it 43% or that goes to taxes. That’s around $54.
So roughly the stock has to drop by about 1/3 to justify that decision. Not the 60% you mention, but still a decision to make. And at 75 or 80 years old with a looming step-up in basis, the decision is even more complicated.
There are many other factors I’m ignoring here, but this phenomenon is real at the UHNW account level and it is prevalent with many stocks. So while I agree it’s impossible to underwrite a name like this at anything close to this valuation, there may be a lot of stock that will just not sell here. And that helps keep the valuation where it is, too.
Completely agree. At some point valuation matters.
This will be the short of the century when and if the market crashes.
backed the sentiment with actual data. very concise and well written!
If it’s so over valued - and apparently the market doesn’t agree it is overvalued then why are you not short?
Great post Brian. Rather than indicting the business, you explained that the business is perfectly solid, but even if things continue to go well, it's overvalued even compared to similar tech stocks. A calm and well put together argument. Kudos.
This is getting boring same old narrative. It's been overvalued at 20 billion and has consistently overvalued....zzzz... to compare with other companies' historical valuation multiple shows that you know nothing about PLTR. never evolved, always backward looking, using traditional lens to view PLTR, the only certainty is that you haters will continue to underperform for a very long time
I have a mate whose bragging about his twenty bagger in this. Mind you, he’s sold 4 times on the way up and holds less than 10% of his original investment in it. I don’t think he can claim genuine 20 bagger status with that 😂. I’ve said to him a twenty bagger should almost be life changing, and certainly portfolio changing. Different mindsets.
There is so much FIAT in the system is has to go somewhere. While ever Presidents and Central banks set the news cycle valuation of returns on stock value are perceived to be more important then the business itself.
Look at Bitcoin. It has achieved very little real benefit to society. It is the promise that keeps it rising.
The west has lost its mind. Completely unreasonable when it comes to implementing a strong economy based on the dictionary definition of strong economy.
An ever rising stock market is not evidence of strong economy.
That’s why I sold at $158. No, I didn’t hold from 7 and it didn’t make me rich. I bought from time to time and I love the stock. But there’s plenty fish in the water and these multiples are smth out of order
Great piece and could not agree more. There is another dynamic here that is difficult to quantify but really critical: tax. This affects many stocks today, not just these ridiculous expensive names. (Apple as a non-grower trading where it does makes little sense). The problem is there is a lot of what I will call ‘locked-up’ shares in many names. 75 year old clients, Trust accounts (where cap gains particularly onerous)- to name a couple- are situations where taking massive gains is a significant decision and not always an easy one. Here is some math: A 75yo NYC resident bought PLTR at $25. At $150 they’d like to sell. That would trigger a cap gain of $125. All in-Fed, State/Local, surcharge- call it 43% or that goes to taxes. That’s around $54.
So roughly the stock has to drop by about 1/3 to justify that decision. Not the 60% you mention, but still a decision to make. And at 75 or 80 years old with a looming step-up in basis, the decision is even more complicated.
There are many other factors I’m ignoring here, but this phenomenon is real at the UHNW account level and it is prevalent with many stocks. So while I agree it’s impossible to underwrite a name like this at anything close to this valuation, there may be a lot of stock that will just not sell here. And that helps keep the valuation where it is, too.