Facebook down almost 75% from its highs..
Facebook is only a 3x now from its IPO. The value today goes back to October 2015.
And revenue is up 27x over that same time period.
ETA: "Same time period" being since IPO.
Now do their expenses.
I know I'm beating a dead horse in here, but the argument that something is cheap merely because it used to trade higher isn't very compelling at all. For starters, this is a very different company now than it was way back then, but more generally, you could make a very compelling case that many of these names never should have traded where they did. You can make an even
more compelling case that the macro environment is substantially worse now than it was then, so even if anything close to those prices may have been justified in the past they no longer are.
Finally, when did 3X over ~10 years (more like ~4X from where it settled after the overpriced IPO) become terrible? It really seems like people don't realize just how unusually great the post financial crisis period had been for equities. Like once in a lifetime kind of great.
This doesn't mean that any particular stock or the market in general isn't going to go back to the moon, but I don't think most people fully appreciate this "golden era" that we just experienced. If you pull up the charts and cover up the parabolic peaks, I think most would be very happy with where we are. I'd certainly sign up right now for a similar return over the next decade, even after this massive re-pricing.
You will probably see a similar return over the next 20 years.
1994-2007 was also a fantastic run. As good as this one in fact.
Bull markets end like it did this year and then they start again like this will….most likely heading into 2024.
Buy high quality, cash flow positive and good dividend paying companies sprinkled in with some good large/mega cap growth and fixed income is becoming highly attractive again.
It’s all cyclical.
That period was no where near as good as this one was.
Obviously there will be another bull market in the future, but are you saying the next 20 years will probably be similar to the run we just had? If so, while I hope you're right, it seems
extremely unlikely. The loosest monetary policies of all time fueling the longest bull market of all time aren't cyclical.
Easy come easy go.
I don’t look to hit homeruns. My returns from 1994-2007 were as good on average as 2009-2021.
For some maybe it was better….but the collapse in high multiple stocks has been staggering and plenty of people are crushed right now who had no clue what they were doing.
And yes it’s all cyclical. All of it. While things may be different in circumstances…..bulls and bears like the economy is cyclical. And yes who says the next 20 years can’t be as good? Who who knows what the future holds.
As far as monetary policy….we will have easing coming in 2024. Not to zero….but they will cut again at some point when all this is behind us.
Rinse and repeat.
With all due respect, your returns are completely irrelevant here- there are people who cleaned up during the first 3 quarters of this year, but that doesn't make it a great environment for investors. The fact of the matter is that the broader stock market (and thus the vast majority of investors) did significantly better from 2009-2021 than from 1994-2007. Like, multiples better. Has nothing to do with hitting homeruns either, simple indexing blew it out of the water.
Everything is cyclical? Uh, okay, but all cycles are not the same, that's what we're discussing. Considering we had the most accommodative policies in history, not only in the US but globally, which fueled the longest bull market in history, it stands to reason that the next "cycle" won't have the same results without the never before seen backdrop.
Obviously no one knows what the next 20 years holds, but just saying "who says it can't be as good" isn't very persuasive. Who says it can't be the worst 20 years in history?
Anyway, I've given my reasoning for why I wouldn't expect the next 20 years to be similar to this insane run, and I think it's a more compelling case than "who says it can't be?" lol.
1994 thru 2007
Avg annual return of the S&P 500 = 12%
This includes the Russian meltdown of 1998, 9/11 and the tech bubble bursting in 2002.
2008 thru October 2022 AVG annual return of the S&P 500 11.42%
This includes the Great Recession, the Greece meltdown, taper tantrum and Fed pivot of 2018.
I will give you November and December of this year that the S&P will recover some more.
But in not so many words…..piss off.
I know exactly what the markets have been doing since 1987 when I first invested my own money at 17 years of age. And have been ever since.
And the only returns that do matter are those of your own. No body cares about my returns? All we do is talk about each other's returns in here.
So once again my returns….and by that matter the returns of the S&P 500 that you said you can index between 1994-2007 were better than the past 14 years of the most accommodating monetary policy in our history.
The markets are cyclical. Returns are cyclical…..and I know my business.
Carry on.
1994 - 1.32
1995 - 37.58
1996 - 22.96
1997 - 33.36
1998 - 28.58
1999 - 21.04
2000 - (9.10)
2001 - (11.89)
2002 - (22.10)
2003 - 28.68
2004 - 10.88
2005 - 4.91
2006 - 15.79
2007 - 5.49
AVG Annual 12% (rounded up from 11.96)
2008 - (37.00)
2009 - 26.46
2010 - 15.06
2011 - 2.11
2012 - 16.00
2013 - 32.39
2014 - 13.69
2015 - 1.38
2016 - 11.96
2017 - 21.83
2018 - (4.38)
2019 - 31.49
2020 - 28.71
2021 - 28.71
2022 - (17.09)
Avg Annual = 11.42%
Blows them away......really? Get your facts straight.
I edited my post as well that you quoted.....let’s include 2008 in the equation....because you know it did happen and is part of the equation. Taking all that into consideration......1994 thru 2007 was just as good as 2008 thru 2022.
Facts for people who invested wisely, never panic, never try to time the market and don’t look to hit homers with every single investment.
Do you know what that also proves? And what I already have known......you don’t need accommodative policy for the markets to work. 1994 thru 2007 proves that. And don’t forget the Fed cut rates heavy in 2002, 2003 and 2004 and started raising them again in 2005 I believe. So while we have been low for longer.....people should have the utmost confidence that the stock market will still provide the very best opportunity at good returns over a 10,15 and 20 year time horizon regardless of what the Fed does.
CYCLICAL!!