For those of you new to MacroEdge Radio and my ancient broadcasting history, let’s face a quick reality check:
I’m officially old so my views are somewhat jaded.
Now I can rant like a pro and if I kick the bucket everyone can look back and say “hey the old dead guy was right” and I can sleep in my urn comfortably knowing that I didn’t leave the clown public stuck in the mentality that the financial and mainstream media believing that their version of the news is actual reality.
What am I talking about?
Remember this classic?
That worked out great for the buy and hold plus my broker cares so much about me crowd.
But what about this gem, one that was advertised as the second coming of Apple when it debuted on the NASDAQ:
Back in the day, which most investors under the age of 30 do not remember, the idea of wearable cameras that were rugged and could hold large amounts of data was considered the biggest innovation since fiber optics. The usual suspects said “buy, buy, buy” and speculated on takeovers, etc.
Sound familiar?
Now look at it. It is a garbage stock because the Wall Street idiocracy believed there was no way the Chinese could produce a cheap, viable knock-off that would fulfill the needs of the masses at a lower cost.
But who is the next GoPro? Let’s look at some stocks with recent all time highs and take a brief look at their P/E ratios to see what kind of extremes the market is at now.
A great concept but doing the same thing that auto dealers, Cars.com, and others do justifies an 83 price-earnings (P/E) ratio?
Especially with auto finance rates north of 7%???
Next up, one that many of our readers may have never heard of:
If one is wondering, what is a RadNet, here’s a good summary believe it or not from Wikipedia:
RadNet is an American radiology firm. The company operates outpatient diagnostic imaging centers. RadNet is the largest provider of outpatient imaging services in the United States.
As of 2020 RadNet has continued to execute its plan for the strategic acquisition of new assets, namely smaller imaging centers.
The company has also begun to open new outpatient centers to work with existing healthcare networks. RadNet also moved to acquire DeepHealth, a machine learning firm working to develop radiology artificial intelligence.
Gee, I wonder. Or perhaps it was the initial gamble that government controlled socialized healthcare would be a bonanza for their company. Of course the refusal of many Americans to buy the crap insurance, or get procedures, or even pay their bills might just be a future impediment to their meager 5 cent per share earnings.
844 P/E and they couldn’t even tell the truth about the intrusion into Hillary Clinton or the DNC’s servers. Yeah, sign me up for the same people to protect my systems as they work with Google and the Pentagon to help protect the government.
Or maybe it is just more “artificial intelligence” hype, you know, like Skynet in the movies.
Next up, the big time day trading black chip on the roulette table.
Thankfully day trading is alive and well. Until it isn’t. A P/E of 873 for a retailer who’s initial design concept was a pathetic knock off of Blockbuster. But by golly let’s pump more money into a dying retail industry which depends on young wealthy males having the ability to play video games as a profession.
The big banana. The big cheese. The big Kahuna. Whatever it is you want to call the Intel of our age.
The deification, the media adoration, the stupidity of what I have witnessed in this stock reminds me of the “I can’t wait to see Netscape in 2030” crowd.
Yeah, I’m freaking old.
But we’re recycling old narratives today to persuade people to buy dicey propositions with no proven long term viability. Nvidia is the best of the lot and Crowdstrike a close second with their government ties making them a prime acquisition target for a larger beast as the price crashes next time.
The reality we are witnessing boys and girls is that history doesn’t repeat because many of the stock symbols from bygone eras are gone, gone, gone.
Play your cards accordingly.
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