$Roku Inc (ROKU.US)$ I'm long ROKU, and plan to stay that wa...
$Roku Inc(ROKU.US$ I'm long ROKU, and plan to stay that way for the long term. And, for so long as the company hits its growth metrics, I can understand how the stock fits a 'just buy it' kind of approach. I think of stocks like $Amazon(AMZN.US$, $Nike(NKE.US$, or $Alphabet-C(GOOG.US$ in this vein.
However, I'd be careful of statements like:
"The longer your investment horizon, the less valuation matters."
That mindset just doesn't fit me as an investor. While I will stipulate that valuing disruptive businesses with aggressive growth profiles is more art than science, I just can't use that as a basis for paying 'any price' for a stock. $Upstart(UPST.US$ is a good example. I bought 10 shares at ~$120, then 10 more at ~$170 right before earnings. Well, bang zoom; I sold 6 shares at $350, no regrets. I'll look to add more UPST on any significant dip, but price appreciation that rapid seems to be more a function of momentum gone wild as opposed to sustainable multiple expansion.
Time will tell; best of luck to all.
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chrissssss_will : Valuation and price are two separate things. In my opinion, if you look at the much higher guidance that the company gave in the last two earnings and the forward P/S of Upstart, it's not crazily overvalued.
Also: if I say "The longer your investment horizon, the less valuation matters" I mean looooooong. Amazon was seen as crazily overvalued ten years ago and so was Netflix. And there were definitely arguments to make about that. Look where they are now. That's what I mean by that sentence.
Ema Hamilton OP chrissssss_will : Yes, fair point about price and valuation, which can be a tricky topic. There are a lot of ways to value a stock. Whatever method you may ascribe to in valuing a stock, I seek to pay a price that represents at most fair value; hopefully, for a wonderful company. So if price is what you pay and value is what you get, the better the price, the better the value. No?
dudedude Ema Hamilton OP : I'm perfectly happy with my Zoom shares. It was at $127 when I bought.
It's beaten down now because people call it 'a Covid play' and the same goes for Peloton. I'm in the red with my Peloton position, but I don't care a bit because price doesn't say anything and valuations are very subjective. I know it very well and I have no shred of doubt. People just look too much at the stock price too much and too little at companies.
I find it funny that people always bring up the Cisco example. Of course, that one was clearly overvalued. It had a P/S of 40 with low gross margins. Peloton now has more or less similar gross margins. If it would be valued like Cisco at the time, it would be between $550 and $600. I think you would know it's overvalued, right? :-)