You are still viewing the market through the "momentum" glasses of the past few years. Momentum investing fad may not return any time soon. FB crushed it, but valuation is still high. Also did you notice that FB slashed spending tremendously last quarter. That helped pad the earnings numbers. also GOOG slashed spending to crush earnings. Both FB and GOOG are totally dependent on the advertising $$. If Ad spending starts to slow down... its not good for either company. CRM...I have always thought there are accounting gimmicks going on there, and NFLX... why are they valued based on subscriber growth vice true earnings? Wall street has this way of focusing on specific numbers other than earnings until that number starts to fade. subscriber growth is slowing at NFLX, so its about to roll over too. AAPL has been hit hard already and it actually has true earnings and trades at a PE of 10. Less than that if you factor in cash holdings. And one thing for sure AAPL will bounce back around product announcement periods. So I would rather start establishing a position in AAPL now for the payoff in the summer/fall timeframe.
Sentiment: Strong Sell
I believe you know why AMZN trades at F P/E of 100, whereas AAPL trades at under 10!
AMZN's business model is completely different from that of AAPL's. If they were to go down that road, why should the market afford them such multiples! WOuld you?
I hope you have the time horizon and the money to afford the wait, which is required in a market where "growth, high multiple" companies are being punished severly.
Just ask yourself where AMZN stock price woul be If we had another similar week? In the 400s?
A Co growing at, so far, 20% with a multiple of 100 leaves no room for hiccups.
I wish you the best and hope you do not too attached to the stock
Lots of money is going into low P/E stocks like AMAG, VZ, and T. AMAG will likely triple this year because their P/E=5 and they have a very solid balance sheet.
I think the 200 institutions that own 80% of the stock have already started to exit. The weekly calls no longer command such high premiums so selling covered calls is not as profitable as it was last year.
More like 300 in 90 days, other than the brief PCLN spike on November 4th, which is a 23% drop (amzn has already dropped about 200 points or 25% as well, since December 29th), but anyway the fallacy in your argument is that it is based on "a stock that is dropping will just keep dropping" which is no more true than assuming that a rising stock will just keep rising.
Over time, headliner stocks like amzn do tend to rise rather than drop, just the way it is right or wrong. What else you gonna buy? T ?
Money isn't free anymore, looking at stocks with earnings to survive with a PE of 10 or less, those with no earnings to go into a serious down spiral, either a profit, try to borrow, or just close shop.