Until a few weeks ago, the stock market was trading at the highest prices (measured against earnings) that we’d ever seen before in history. More expensive than 1929. More expensive than 2000. In fact, you had to go all the way back to 1844 (during the first railroad boom) to find a time where stocks were this expensive.
No discovery in the history of science has had a larger impact than that of monoclonal antibodies (“mAbs”) – the laboratory-made proteins that act like precision-guided cruise missiles, targeting a specific molecule in the body. Last year, five of the top 10 best-selling drugs in the world were mAbs, including the number-one best-seller Keytruda, Merck’s cancer therapy that did $29.5 billion in revenue.
We’ve noticed a growing consensus in the financial media that the Big Tech giants are currently trading at cheap valuations following the recent market correction. Given this backdrop, let’s look at how “cheap” these hyperscaler stocks really are… and you might be surprised.
In Distressed Investing’s December 2024 issue “Rising From The Ashes,” Marty Fridson and his team recommended buying QVC’s 4.375% bond maturing September 1, 2028, then at $840, up to a price of $860. The bonds currently trade for $878, up 4.5% from the entry price. We liked QVC’s business –- which had been improving –
To maximize your future returns, it’s important that you buy great businesses when you can acquire them for substantially less than their intrinsic value. Here’s a real, current example of a great business trading at a truly attractive price.
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While the possible collapse of the Treasury-bond market and the end of the global dollar financial system will certainly be catastrophic for many companies, there are still plenty of great businesses that will continue to provide goods and services and earn good profits.
In our democracy there’s a huge incentive for people to vote for benefits (money, credit, patronage) they do not have to pay for. These incentives create huge inefficiencies in our economy. Thus, Porter writes, it’s unlikely Elon Musk or anyone will be able to reduce government spending – and Social Security will disappear.