I have read alot about the FANG Stocks latley. Their PE ratio blows my mind.
Facebook: 100
Google: 31 (Seems Cheap by comparison!!)
Netflix: 300
Amazon: 900
These are insane valuations. I recently had a light bulb go off and relaize what the difference between gambling and investing is. Investing is having a plan with an edge and sticking to it. Gambling is making a trade and hopeing for the best regardless of risk / reward.
At these valuations I just do not see any fundamental reason for much more upside in these stocks. To go long now would be to just hope for gains based on more irrational excitment from others. The downside could be termendous. So I think that is one to avoid.
I do not see many stocks offering Ben Graphms margin of safety in todays market. I think sitting on the sidelines at this time is prudent.
