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Quick travel rant before I shatter the bubble narrative right in front of your very eyes. I’m on my way to Scottsdale for my brother Michael’s bachelor party (I’m the best man, not to brag) so these things are top of mind.
1/ If I had a hate list, at the top of it would be the JFK airport. I’d short it and long Laguardia with everything I own, including my sentimental belongings. People were hopping the fence of the security line like it was the Purge. Not for me.
2/ American Airlines makes purchasing WiFi feel like I’m signing up for a new software vendor. Their pricing page is structured like a SAAS company, literally. There’s a monthly option for $49.95/month and an annual option for $599/year. Nowhere in my ticket description was I told that they’d be turning the flight cabin into some sort of MRR / ARR recuring revenue dungeon. Is American Airlines just WiFi Plane SAAS? That would be pretty HALO tbh. Don’t hate it.
“Matt, enough. Give me the chart.”
You’re right. I’m doing too much. Chart time.
The chart below shows the 52-week drawdown in the price of the S&P 500 Technology sector vs the drawdown in the forward P/E ratio of the sector.
These lines typically move together, but they have diverged recently.
The forward P/E ratio is in a 25% drawdown while the price is hovering around highs.
The only way this happens is if the forward earnings estimates are getting revised up at a faster pace than the acual price is rising. The fundamentals are literally outpacing the stock prices.
That doesn’t feel like bubble behavior to me.
I mean maybe, but probably not.
Catch my Grand Rapids hedge there?
Today’s chart was made possible by the always fantastic programming work of Eric Diviney at Exhibit A.
Eric is our CTO and tackles the development of new charts (for our Chart of the Week), new features, maintains the website, and is a straight baller. How do you get the chart above to update daily with fresh data? I have no clue, but Eric does. And he makes it happen every. Single. Time.
Imagine one person coding an entire platform by themselves and managing all of the tech, front to back.
Imagine no more. Because that’s Eric.
Killing it dude. Appreciate all you do for us and our clients.
Michael and Josh had Neeraj Khemlani and Matt Ankrum on TCAF this week to talk about 100-baggers. These guys killed it and I had a great time listening. I think you will too. Link below to the YouTube version.
That’s all for today. Thank you so much for reading and I hope everyone has a great weekend.