Authors Walnut Ave Value
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I was still in high school in 2000, so obviously wasn't investing.
But the more I read, the more I realize it wasn't just a using "eyeballs" for valuation problem.
Thread below:
First up Xilinx
They were the leaders (and still are) with ~40% share in FPGAs. The end market was growing. They were growing fast as shown in this chart for fiscal year 2001 ending in March 2001
The CAGR was lot higher in closer to 2000 - it was growing 50%+. Until 2001 that is. That's when revenues dropped 30% due to market correction.
Xilinx - an innovator and leader in FPGAs - did not reach same stock price until 2018!
Next up - Microsoft
It was growing fast, Bill Gates was talking of PC plus era where internet would enable new features
But MSFT got multiple compression problem as covered in this excellent tweet from @corry_wang
Stock price to dropped from the highs of late 1999 and didn't get back till 2016, despite quadrupling earnings in the next
But the more I read, the more I realize it wasn't just a using "eyeballs" for valuation problem.
Thread below:
First up Xilinx
They were the leaders (and still are) with ~40% share in FPGAs. The end market was growing. They were growing fast as shown in this chart for fiscal year 2001 ending in March 2001
The CAGR was lot higher in closer to 2000 - it was growing 50%+. Until 2001 that is. That's when revenues dropped 30% due to market correction.
Xilinx - an innovator and leader in FPGAs - did not reach same stock price until 2018!
Next up - Microsoft
It was growing fast, Bill Gates was talking of PC plus era where internet would enable new features
But MSFT got multiple compression problem as covered in this excellent tweet from @corry_wang
Stock price to dropped from the highs of late 1999 and didn't get back till 2016, despite quadrupling earnings in the next
12/ "The multiple matters just as much as the growth"
— Corry Wang (@corry_wang) September 1, 2020
Sorry guys, I couldn't resist fitting at least one truly hot take in here... pic.twitter.com/NuT7dIeRBd