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VMware, Inc. Message Board

i_am_mothra_stewart 23 posts  |  Last Activity: Apr 28, 2016 9:10 PM Member since: Jun 3, 2005
  • Reply to

    I loaded up on options today

    by i_am_mothra_stewart Apr 27, 2016 4:33 PM
    i_am_mothra_stewart i_am_mothra_stewart Apr 28, 2016 9:10 PM Flag

    The only reason for today's selloff from the open, in my view, is the BOJ and GDP news. The damage has been done, but now that Amazon has reported a blowout there is hope that FB's momentum can be reversed tomorrow.
    Whether we hit 115 again or not, we will see 125, 130, and probably 140 this year. Do you trade for pennies here and there or do you just buy and hold and watch the money pour in? I say buy it and hold onto it.

    Sentiment: Strong Buy

  • i_am_mothra_stewart i_am_mothra_stewart Apr 28, 2016 9:07 PM Flag

    It's not just the growth rate. Even if you can grow earnings at 30% year over year, at $600B you will still be valued at a 20 P/E maximum, maybe even only 15. It's because companies that large have zero buyout risk, i.e. zero buyout premium. Any small company could be a buyout target. When their growth is fast, they get a higher P/E precisely because it makes them attractive buyout targets. No one can buy a $600 billion company. So you value it like an interest bearing instrument.

    Sentiment: Strong Buy

  • i_am_mothra_stewart i_am_mothra_stewart Apr 28, 2016 8:57 PM Flag

    There is a long way to go to get there. The stock price would be $340.91 per share, a 192% gain from here. Supposing Facebook is still growing earnings at 10% year over year at that point, it might be able to support a 10 P/E, which means it would have to earn $34.09 per share per year, or $100 billion dollars per year. Right now it's on track to perhaps make $4 (high estimate) this year.
    Mark Zuckerberg is a smart guy and so far everything he's done has worked brilliantly. He will have to keep doing that consistently to get to that trillion dollar mark. WhatsApp, Oculus, Messenger, will all have to pay off big time, and that still won't be enough.
    In the short run, I do think we can see $140-150 this year. But the stock will continue to suffer shrinking mutiples as its valuation goes up, just like Apple and every other large company does. FB will not hit $341/share with $10 or $15/year/share in revenue. No way.

    Sentiment: Strong Buy

  • Reply to

    real short squeeze next Monday

    by vsgn_fda Apr 28, 2016 7:05 PM
    i_am_mothra_stewart i_am_mothra_stewart Apr 28, 2016 8:48 PM Flag

    Can't we have the short squeeze tomorrow? Because that's when my options expire.
    Whatever happens with the price tomorrow, I will sell my options and buy more FB stock.

    Sentiment: Strong Buy

  • i_am_mothra_stewart i_am_mothra_stewart Apr 28, 2016 8:47 PM Flag

    Icahn is not interested in FB, I promise you. Sure it would be great, but it will not happen. He bought NFLX because it was ridiculously beaten down. And he bought AAPL because he mistakenly thought that a low P/E meant a buying opportunity when it did not.

    Sentiment: Strong Buy

  • i_am_mothra_stewart i_am_mothra_stewart Apr 28, 2016 8:45 PM Flag

    I should have taken the BOJ news this morning as my cue to sell my call options immediately. Terrible timing by them. Couldn't they have waited till tomorrow, after my options would have been sold and my fortune made?
    I held into the close, as I expected a blowout from Amazon to spill over into FB. Perhaps we'll see $120 again tomorrow, but it's looking doubtful. Usually takes 2-3 days for consolidation after a pop that fades into the close. Still, I can hope.

    Sentiment: Strong Buy

  • Reply to

    I loaded up on options today

    by i_am_mothra_stewart Apr 27, 2016 4:33 PM
    i_am_mothra_stewart i_am_mothra_stewart Apr 28, 2016 6:15 PM Flag

    I don't trade options very often, but the pricing on those GOOG call options in April 2008 was absurdly cheap, as I remember. I think I picked up a bunch of 470s and 480s and perhaps a few 490s and 500s. I wished I had picked up more of the higher strike ones, since they were priced near zero. I could have retired to a private island with those.

    Sentiment: Strong Buy

  • i_am_mothra_stewart i_am_mothra_stewart Apr 28, 2016 4:19 PM Flag

    They earned 0.77 in Q1. What's 4 x 0.77? What P/E does that give you? Under 40. And by all metrics they are accelerating at a rapid pace. Current P/E might be as low as 27 when you look back on it in 12 months.
    Don't be a fool.
    Apple's growth is over, while Facebook's is just beginning.

    Sentiment: Strong Buy

  • i_am_mothra_stewart i_am_mothra_stewart Apr 28, 2016 4:16 PM Flag

    No one who bought today made money. No one who bought at 40 and sold at 20 made money either.
    What you've made, you'll lose eventually. It's the long-term holders who get rewarded with the real profits.

    Sentiment: Strong Buy

  • Reply to

    Going down.

    by stkpkr3 Apr 28, 2016 1:01 PM
    i_am_mothra_stewart i_am_mothra_stewart Apr 28, 2016 1:14 PM Flag

    Fine. Buy more. 150 within 6 months.

    Sentiment: Strong Buy

  • i_am_mothra_stewart by i_am_mothra_stewart Apr 28, 2016 12:49 PM Flag

    Facebook will earn at least 3.50 this year, but I think it can do at least 3.64.
    Q1: 0.77
    Q2: 0.83
    Q3: 0.89
    Q4: 1.15
    FY: 3.64

    Trading at 118, FB is at 33.7 times 3.50, and 32.4 times the higher one. For a company growing revenues 50% year over year, this is very cheap.

    The only reason it is not higher is because the market cap is already huge at about $340B. Sellers may be taking it as a rule that such a large market cap company does not have much further to grow.

    But how many companies do you know of with 1 billion daily customers? Facebook has a Super Bowl sized audience every single day, and can show all of them ads targeted toward their interests.

    This company has much further to grow.

    Sentiment: Strong Buy

  • Reply to

    Average longs need to learn

    by tslato300e Apr 28, 2016 12:31 PM
    i_am_mothra_stewart i_am_mothra_stewart Apr 28, 2016 12:34 PM Flag

    What about how I've been long FB since the stock was about $80 and am now looking at 50% gains on those shares?
    Average traders need to learn that trading in and out is a losing strategy. Find something good and hold onto it. Or find something terrible, and hold onto your shorts. Stop trading.

    Sentiment: Strong Buy

  • Reply to

    I loaded up on options today

    by i_am_mothra_stewart Apr 27, 2016 4:33 PM
    i_am_mothra_stewart i_am_mothra_stewart Apr 28, 2016 10:36 AM Flag

    Yeah, I found them, if you read further down my post you'd see.
    I'm confused as to why I can't chart those days, though.

    Sentiment: Strong Buy

  • Reply to

    Hope this falls back to 115 want to buy more

    by stkpkr3 Apr 28, 2016 10:08 AM
    i_am_mothra_stewart i_am_mothra_stewart Apr 28, 2016 10:34 AM Flag

    No it shouldn't. It was around 115 a few weeks ago, before people started freaking out that there might be a slowdown. Why would it go back down there when we just found out things are far better than even the highest Wall Street estimates? Answer: it wouldn't.

    Sentiment: Strong Buy

  • i_am_mothra_stewart i_am_mothra_stewart Apr 28, 2016 10:33 AM Flag

    How much money are you losing today?

    Sentiment: Strong Buy

  • i_am_mothra_stewart i_am_mothra_stewart Apr 28, 2016 10:32 AM Flag

    This is FB, not TGT.

    Sentiment: Strong Buy

  • i_am_mothra_stewart by i_am_mothra_stewart Apr 28, 2016 10:31 AM Flag

    In the weakest quarter of the year, Facebook has just nearly equaled it's mind-blowing 4th quarter last year.

    Do you even understand what that means?

    Think about this, too. US GDP for Q1 was slower than expected, but most are expecting a pick up in the rest of the year. What do you think that will do for ad spending?

    Facebook will continue to report monster earnings. Own it. Do not short it. Sell puts, don't buy them.

    Sentiment: Strong Buy

  • Reply to

    I loaded up on options today

    by i_am_mothra_stewart Apr 27, 2016 4:33 PM
    i_am_mothra_stewart i_am_mothra_stewart Apr 28, 2016 10:20 AM Flag

    Explain why you think FB would trade at 115 after reporting a blowout quarter, when they were trading at 115 just a couple of weeks ago before everyone started freaking out about user engagement.
    Is it just a feeling? If so, I feel like you're going to lose a lot of money.

    Sentiment: Strong Buy

  • Reply to

    I loaded up on options today

    by i_am_mothra_stewart Apr 27, 2016 4:33 PM
    i_am_mothra_stewart i_am_mothra_stewart Apr 28, 2016 9:57 AM Flag

    Hmmm, neither Yahoo Finance nor Google Finance could give me a chart of that range, but I was able to find the historical prices on Yahoo.
    Note that all these share prices are pre-split. These were the actual prices at that time.

    Also note that sentiment on GOOG was much more negative then than it was on Facebook this morning. It had peaked at 747.24 on November 7th, 2007. So it was down almost 40% from its peak when I bought call options on it in April, 2008, and it was trading around 450. Sentiment was so low that even the call options with a strike a few percent higher than the current price were trading as if there was almost no chance of a beat. It made me nervous, but I went with what I knew.
    On the other hand, FB was never down much more than 10% from its recent peak. Moreover there was a lot of negative sentiment about the market in general around that time, in the runup to the financial collapse later that year. Google's shocking profit was all the more shocking in that environment. Whereas Facebook is more competing with itself. No one could believe it would come even close to matching last quarters incredible blowout performance, but it did. And like last year, it will likely surpass that next quarter. The end of growth here is not even remotely in site.

    Now, the numbers from 2008:

    On April 17, GOOG (which is now GOOGL) opened at 455.63, and closed at 449.54, down 1.34%.
    On April 18, it opened at 535.21 (up 19% from previous close ), hit a high of 547.70, a low of 524.77, and closed at 539.41, up just 0.78% from the open, but gaining almost exactly 20% over the previous close, for its biggest one-day gain ever.
    As I mentioned before, on April 17th in after hours trading, if I remember correctly, it "only" hit about 500, which is up about 10-11% over the close. The stock gained twice that much by the end of the next full day of trading.
    Not only that, the stock continued to move up over the next few weeks, topping out at about 602.45 on May 2nd, 2008.

    Sentiment: Strong Buy

  • Reply to

    I loaded up on options today

    by i_am_mothra_stewart Apr 27, 2016 4:33 PM
    i_am_mothra_stewart i_am_mothra_stewart Apr 27, 2016 7:29 PM Flag

    I also looked at the May 6th expirations. If the stock ends tomorrow at $120-125 I will definitely wish I had either loaded up more on the 114-116 range, or that I had taken the May 6ths for the higher strikes.
    Last earnings FB jumped from 95 to about 108 (?) on earnings day, and hit 117 I think 3-5 trading days later.
    I think the May $125 will do well. You could obviously even dump them tomorrow for a big gain if you want to. They'll probably be $2-3 if FB opens at $119.
    But I am of course hoping for a repeat of my GOOG adventure in 2008. Open at $123, soar to $130 by close. That would make my year again.

    Sentiment: Strong Buy

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