Young Research & Publishing Inc.

Investment Research Since 1978

Disclosure

  • About Us
    • Contributors
    • Archives
    • Dick Young’s Safe America
    • The Final Richard C. Young’s Intelligence Report
    • You’ve Read The Last Issue of Intelligence Report, Now What?
    • Dick Young’s Research Key: Anecdotal Evidence Gathering
    • Crisis at Vanguard
  • Investment Analysis
    • Bonds
    • Currencies and Gold
    • Dividend Investing
    • ETFs & Funds
    • Investment Strategy
    • Retirement Investing
    • Stocks
    • The Efficient Frontier
  • Investment Counsel
  • Retirement Compounders®
  • Free Email Signup

This Company can Turn $1 into $460

October 23, 2015 By Jeremy Jones, CFA

As the late great Yogi Berra might say of this market, “It’s like De Ja vu all over again.” More stimulus from the global central banking cabal (ECB yesterday, Bank of China today, BOJ next week) and the fab five (Facebook, Amazon, Google, Apple, Netflix) are again driving the market to ever higher levels on the back of quarterly earnings reports. Sounds like a replay of, well, anytime over the last three years.

The gains these stocks are making on what are regular earnings surprises (h/t analyst enablers) is confounding to the serious long-term investor. Amazon is poised to add $55 per share to its stock price today on the back of a quarterly earnings report that came in about $0.30 better than analysts were expecting. Google’s stock also popped this morning on an earnings beat. Google looks like it will add $74 to its stock price on an earnings beat of $0.16. So at the circus that is the quarterly earnings season, every additional dollar Google earns above analyst estimates is apparently worth over $460 in market capitalization and every additional dollar over estimates earned by Amazon is worth $183. You don’t have to be a calculus whiz to understand this math isn’t sustainable. Prices can only outpace earnings gains for as long as investors will tolerate the foolishness. Yes, that means the “investors” in these shares are playing the greater fool game of investing.

It’s hard to be both a long-term investor in this environment and doing better than the fab-five driven S&P 500. The serious investor is advised to avoid the hype and maintain a cautious approach.

Share this:

  • Email
  • Twitter
  • Facebook

You Might Also Like:

  • Dow Jones Industrial Average 30 Stocks
  • Earnings Predictions Scare Investors
  • Is This Company About to Beat Tesla, Google and Apple to an All-electric Autonomous Car?
  • Author
  • Recent Posts
Jeremy Jones, CFA
Jeremy Jones, CFA, CFP® is the Director of Research at Young Research & Publishing Inc., and the Chief Investment Officer at Richard C. Young & Co., Ltd. CNBC has ranked Richard C. Young & Co., Ltd. as one of the Top 100 Financial Advisors in the nation (2019-2022) Disclosure. Jeremy is also a contributing editor of youngresearch.com.
Latest posts by Jeremy Jones, CFA (see all)
  • Money Market Assets Hit Record High: $5.4 Trillion - May 26, 2023
  • The Mania in AI Stocks Has Arrived - May 25, 2023
  • The Wisdom of Sam Zell - May 24, 2023

Search Young Research

Most Popular

  • Starving for Fixed Income? I Can Help
  • June Is Retirement Compounders Month
  • ALLIGATOR MARKET: Calm Surface Hides Danger Below
  • Vanguard Wellesley (VWINX) vs. Wellington (VWELX): Which Fund is Best?
  • CBDCs Not “Just Another Form of Money”
  • What's Hiding In the London Metals Exchange Warehouses?
  • End of ESG?
  • China Increases Its Gold Reserves for Seventh Month Straight
  • Successful Investing Is a Mindset
  • Young’s Retirement Compounders

Don’t Miss

Default Risk Among the Many Concerns with Annuities

Risk and Reward: An Efficient Frontier

How to be a Billionaire: Proven Strategies from the Titans of Wealth

Cryptocosm and Life After Google

Warning: Avoid Mutual Fund Year End Distributions

Is Gold a Good Long-term Investment?

How to Invest in Gold

Vanguard Wellington (VWELX): The Original Balanced Fund

What is the Best Gold ETF for Investing and Trading?

Procter & Gamble (PG) Stock: The Only True Dividend King

The Dividend King of the North

You’ll Love This if You’re Dreaming of an Active Retirement Life

The Importance of a Balanced Portfolio

Invest with Peace of Mind and Comfort

What Kind of Life Are You Investing For?

RSS The Latest at Richardcyoung.com

  • Oh Canada: Wildfires at a Blistering Pace
  • RAGE Gauge June: Remember When You Were A Kid and Money Was Free?
  • What Do You Know About Vanguard’s Wellesley Income Fund?
  • CRUMBLING EMPIRE: Major Hotel Flees San Francisco as City Suffers
  • MUSIC IN DANGER: Is This the Worst Use for AI?
  • Crushing the Heretics
  • Starving for Fixed Income? I Can Help
  • The Four Most Important Words in Investing
  • SUPER STATE RISING? This State Is Doing All the Right Things
  • RIP Astrud Gilberto

RSS The Latest at Yoursurvivalguy.com

  • RAGE Gauge June: Remember When You Were A Kid and Money Was Free?
  • Your Retirement Life: Striped Bass Fishing off Block Island
  • Artificial Intelligence or Four-Year Olds?
  • Forbes Global 2000: The Bigger They Are, the Harder They Fall?
  • Starving for Fixed Income? I Can Help
  • SUPER STATE RISING? This State Is Doing All the Right Things
  • End of ESG?
  • Your Survival Guy’s Take on ChatGPT and AI
  • ALLIGATOR MARKET: Calm Surface Hides Danger Below
  • My Nephew Graduates, and I’m Larry the Cable Guy

About Us

  • About Young Research
  • Archives
  • Contributors

Our Partners

  • Richard C. Young & Co.
  • Richardcyoung.com

Copyright © 2023 | Terms & Conditions

loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.