r/valueinvesting
If You Invested $1k In PLTR a Year Ago...
PLTR underperformed small-cap value stocks despite great earnings, as its high valuation already priced in the good news.
- The company has excellent fundamentals and posted some of its best earnings reports ever.
- It might indeed be one of the best businesses in the world.
- The stock has declined over the past year, significantly underperforming small-cap value stocks.
- All good news and excellent earnings were already priced in, leaving no margin of safety for FOMO investors.
- High valuation multiples ignore the importance of base rates and valuation in value investing.
You'd have $980 today. Much maligned and incredibly boring small cap value (VBR specifically) is up just over 20%, in comparison.
It seems that 90% of the posts on this sub over last couple months are about some sort of FOMO trade around semis, DRAM, whatever. A year ago, they were all about Palantir. And Palantir has posted some of the best earnings reports I've ever seen since, and might indeed be one of the best businesses in the world, but that was already priced in by the time FOMO investors jumped in.
Base rates matter, multiples matter, and always ask yourself what you know that the market doesn't.
“iF yOu bOuGhT iT iN 2023 fOr $16 yOu’D bE uP 677%”
what the fugg kinda post even is this? This sub has turned to compete shite
Buying cyclicals at top is not value investing. They have low PE at the top of cycle and high PE at the bottom.
They have not had a PE as high as Palantir even at the very bottom. There's also evidence the cycle is changing
Micron had negative earnings in 23.
Agreed that Palantir is still extremely expensive. It is dangerous to think "this time is different" for cyclical s.
If you invested 1k at google when it was at 340 and now 300 you have lost...
OP: "It seems that 90% of the posts on this sub over last couple months are about some sort of FOMO trade around semis"
The last 2 months SOXX has gone up 47%, while small and large cap value have gone up 5%. Do Value investors feel any embarrassment at how much they're underperforming?
Brb, going to make a post that if you invested 1k into PLTR 2 years ago you would have 6k right now!
What? Their margins are and were trash.
What are you talking about?
Sticky revenue (gov. contracts built over years, very high switching costs in commercial), high margins, no required leverage.
If you bought Paypal 1 year ago, you'd be down 45%
I probably could explain it to my grandma, she's not overemotional when it comes to Palantir (which is what I suspect is happening here).
Like I said in another comment to someone else, I'm 100% certain this thread would never have happened in a post about SPGI, V or MA even if I said the exact same things. No one would have batted an eye at "price doesn't determine business quality". Only here people comment acrimoniously because of the general opinion that Palantir is an evil company.
Doesn't make it wrong.
So? Does that make it wrong?
Try reading.
We are saying it’s a good business. Not a good investment. How tf is that being an edge lord? For a top 1% commenter, I’d think you’d be able to differentiate something being a good business based on financial statements while simultaneously being too overvalued based on valuation metrics. If discussing financial statements is edge lord behavior to you, perhaps wallstreetbets is better suited for you.
I have a feeling this whole thread would never have happened in a post about V, MA or SPGI even if we said the exact same things.
Has to be people getting very emotional due to Palantir specifically, otherwise I'm lost.
😆 I get what you’re saying too. Your comment is actually a good point. Distinguishing good businesses helps you find good deals when the market crashes and valuations decline heavily. You don’t wanna jump into a stock that’s crashed but about to go bankrupt, but you wanna keep a good business on your watchlist in case it crashes so you can buy it at a discount.
A good post about “boring ETF’s” (I love small cap too) being better than FOMO stocks and somehow, half the comments are enraged that you mentioned PLTR, as if you didn’t clearly illustrate that it would have been a bad investment a year ago despite the hype.
You’re a true value investor. The other smooth-brains in this sub need to learn how to read.
Personally I hope palantir crashes and burns. Thiel and his ilk belong in prison
The metrics you're giving me don't typify good investments.
You're still missing the point. And I'm wasting my time.
cool, I guess
idk what your point is, I didn't reply to OP, I replied to a comment talking about Palantir specifically. maybe your beef is with them?
Holy fick we did not mention it. The op mentioned it, and me and op commenter are simply saying it’s a good business. It is a good business. But a bad valuation
Even the original post states deep value was a better investment than palantir. That’s the whole point of the post. That scv outperforms shiny overvalued stocks. You guys are just somehow upset whenever you see the ticket pltr. PLTR derangement syndrome fr.
You're having a hard time grasping the difference between price, value, and quality, aren't you?
Reminds me of Firesign Theater, “If you lived here you’d be home by now.”
Sold off my holdings of it when it went from the high 180s to around $201ish. Felt pretty good having bought my shares under $35
I know value has taken on new meaning since then, but I always imagine someone pitching Ben Graham on a value stock only to finally say, "The p/e is 150, but..."
Yes it is easy to cherry pick dates of any stock and say if you had bought on X date you'd have Y amount of money now to show they would have made or lost an.above average amount of money. Its meaningless and you could play the same game with just about any stock by cherry picking high and low dates in retrospect. Not to dismiss OPs point about being careful about frothy markets and lofty multiples buying shit at the top but cherry picking dates to make an argument about making or lose above average amounts of money on any given stock isnt particularly useful because its inherently biased.
What happened if you invested in PLTR two years ago?
You'd have \~$920 after inflation.
Found this post randomly on a top random suggestion, opened it because I'm laughing that I purchased almost nothing but PLTR from 2020 to 2023 and am up just over 1 million dollars.
No matter what though, investing subs will never pass up a chance to tell people that investing in single tickers is nothing but degenerate gambling and that you can't win.
Well done.
I’m on the lookout for my own multibagger right now. It is fun doing the work.
fuck palantir