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Interesting decision Weijian. Looking forward for more discussions on growth and tech.
Just a few comments, GME is not a "tech" stock nor a "growth" stock. It's a meme stock, which stock price is driven mainly by market mechanics: (1) fund managers, investors that is betting on it to fall, hence the high short ratio and (2) longs that are betting on it to rise from short/gamma squeeze.
NAV usually has little to do with intrinsic value of high quality growth companies (though, if net cash on book is quite significant, it sometimes make sense to back out cash during valuation; if debt is significant, it sometimes make sense to consider debt; hence, enterprise value is much more frequently used to value/price growth stocks nowadays); from the words of Warren Buffett itself (1998 Shareholder meeting):
Source: https://www.gurufocus.com/news/1441219/h...st-returns
Just a few comments, GME is not a "tech" stock nor a "growth" stock. It's a meme stock, which stock price is driven mainly by market mechanics: (1) fund managers, investors that is betting on it to fall, hence the high short ratio and (2) longs that are betting on it to rise from short/gamma squeeze.
NAV usually has little to do with intrinsic value of high quality growth companies (though, if net cash on book is quite significant, it sometimes make sense to back out cash during valuation; if debt is significant, it sometimes make sense to consider debt; hence, enterprise value is much more frequently used to value/price growth stocks nowadays); from the words of Warren Buffett itself (1998 Shareholder meeting):
Quote:Buffett said Japanese stocks were bound to sell at a lower price-book ratio than U.S. stocks because "Japanese companies are earning far less on book than American companies." He went on to add:
"And earnings are what determine value, not book value. Book value is not a factor we consider. Future earnings are a factor we consider. And as we mentioned earlier this morning, earnings have been poor for a great many Japanese companies."
Source: https://www.gurufocus.com/news/1441219/h...st-returns
“If you buy a business just because it’s undervalued, then you have to worry about selling it when it reaches its intrinsic value. That’s hard. But if you can buy a few great companies, then you can sit on your ass. That’s a good thing.” - Charlie Munger