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HistoricalPEGuy (62.32)

Still shorting LNKD on CAPS? Ouch.

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August 01, 2013 – Comments (5) | RELATED TICKERS: ATW , LNKD

Yup, LNKD continues to show the world what a freaking great company they are.  Are they overvalued?  Maybe.  Should you bet against them?  

 

Being a value investor for so many years, i became curious about high growth stocks.  Long nights researching many high growth companies led me to some simple truths.

 

#1 Forget about P/E ratios - I don't care if the company has a P/E of 2,000,000 or 0.065 - don't consider it.  Good examples - LNKD and ATW.

 

#2  Do a basic health check - Always check cash flow, cash and debt.  Smart growth companies know that they need to balance their checkbook at some point.  

 

#3  Love -  To properly invest in a high growth comapny, you've got to love their business model.  I love LNKD.  Their business model just makes sense to me.  Same with ATW.  If you are thinking of investing in a high growth company, just ask yourself a simple question.  Do you think their product is amazing?

 

I am long on ATW and LNKD.

 

- HPEGuy 

5 Comments – Post Your Own

#1) On August 02, 2013 at 11:09 AM, Mega (99.95) wrote:

I know how to backtest PE ratios, to confirm that stocks with low PEs have a lot higher average returns than stocks with high PEs. But how do you backtest love?

Good luck, you will need it.

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#2) On August 02, 2013 at 5:45 PM, HistoricalPEGuy (62.32) wrote:

Funny.  That is the secret isn't it.   Good luck with backtesting....

 

 http://www.fool.com/investing/general/2007/09/20/butter-in-bangladesh-predicts-the-stock-market.aspx

 

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#3) On August 02, 2013 at 7:42 PM, Mega (99.95) wrote:

OK, you're free to imagine that the price to equity ratio is as irrelevant as data mining Bangladeshi butter.

I still don't understand how you determined, through many sleepless nights of research, that love would be an effective way to invest.

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#4) On August 02, 2013 at 8:03 PM, Mega (99.95) wrote:

sorry, "price to earnings"

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#5) On August 02, 2013 at 10:34 PM, HistoricalPEGuy (62.32) wrote:

I deserve the dig... I guess I would just say that part of investing means investing in great companies that sell great products.  That is very subjective and is where love comes in.  You can't research it.  There is no metric.  You've actually got to believe.  That's why high growth investing is so hard to understand, a big part of it is speculation - that the company will continue to grow at high levels.

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