2Wk
Brother you know when the PEG ratio is over 1 a stock is considered overvalued? 😅 Just saying since you highlighted it like it is a wonderful rating.
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@Pesce I don’t concern myself with valuation that much.
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2Wk
@S-STATIK why did you highlight something that tells something about valuation?
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@Pesce it’s slightly below the average of what Visa usually trades at which is 2.10 so fair value for Visa maybe expensive for other companies.
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2Wk
I do not think you know how this ratio works. Fair value is a PEG of 1. So historically you overpay double the price than fair value. Not saying it's a bad decision to buy Visa. Just trying to make you understand what you highlighted.
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@Pesce I don’t think you are right. The PEG value above 2 is considered overvalued, not 1. Depending on the quality aspect and fcf yield, sometimes even 2,5 is considered acceptable
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2Wk
@TheWorst you are questioning Peter Lynch?
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@Pesce dude it’s Visa… You think Visa will ever trade at a p/e of 12 while growing 12% a year?
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2Wk
@S-STATIK stocks will be stocks look what happened to Nike, United health group, etc etc. Not debating that Visa is a bad company just trying to lecture you guys that valuation matters and it matters a lot. Every stock that trades above its metrics technically can go back to fair value. Not saying it will maybe it happens maybe not. But always keep in mind that buying companies with high valuation comes with more risk than buying a company at fair value.
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•@Pesce In fact, I am. I've read all of his books, and the PEG ratios he describes are from the 90s, a time that didn't account for today's inflated tech stock growth. If you simply plug in the numbers from his books, the formula won't work for most companies today. Besides, the 'growth' figure in the PEG calculation can be wildly inaccurate. This is precisely where you can find real bargains. If it were that simple to find a stock with a PEG below 1, everyone would be a stock market genius.
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2Wk
@TheWorst 1. You cannot just change a ratio it does not work like that.
2. If you make investment decisions only of a PEG ratio then investing is not for you it's just a handy tool to see if a stock is good valued or not.
3. Do whatever you like all i did was give some knowledge. If you want to believe that buying companies with high PE and or PEG is justified. Then you made a well thought decision. All we know from value is that sooner or later some stocks will go back to fair value and that brings the risk of losing money. Not saying it will happen to Visa, just saying it can. Hasta luego 😁
2. If you make investment decisions only of a PEG ratio then investing is not for you it's just a handy tool to see if a stock is good valued or not.
3. Do whatever you like all i did was give some knowledge. If you want to believe that buying companies with high PE and or PEG is justified. Then you made a well thought decision. All we know from value is that sooner or later some stocks will go back to fair value and that brings the risk of losing money. Not saying it will happen to Visa, just saying it can. Hasta luego 😁
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