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Cheap Stocks Are Going Extinct
Where can one find some cheap stocks? Put differently, where are the bargains in the equity market?
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Sounds like a brewing catalyst for a dealer-driven gamma-hedging right-side risk on rally! 23x forward earnings may just be a bargain. Or maybe global fiat is losing buying power even for DM shares
Does a portfolio of dividend stocks paying 8 1/2 % dividends sound too expensive? I pay attention more to the yield than the current price, which is an opinion.
Looking at PEs is pedestrian. Cash flows and free cash flows (future), growth rates, balance sheets, etc are most important in calculating an “Intrinsic Value”. Free Cash flows have gone down for some but will that investment translate to higher future growth or is it to defend against current cash flows?
Yes, it takes assumptions about an uncertain future, an uncertain discount rate, etc.
What is “cheap”? a 20% disc to IV? A 40%? Definitely has changed over the years.
“Cheap” stocks are not extinct (though they are NOT as cheap as they could be years ago), they pop in and out but they tend to be able to be found with some diligence. Some of the “cheap” stocks of a year ago look more expensive now and some expensive stocks a year ago look, dare I say, even “cheap”. I wouldn’t be invested if I didn’t find attractive risk/rewards. But as always, we shall see…………………………………………………….