calbear93 said:

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Unit2Sucks said:

---

calbear93 said:

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DiabloWags said:

---

S&P down 3.2%
NAZ down 4.3%

First close under 4000 in the S&P.
The "crash" continues.

---

I suspect the downward trend will continue for a while even with sporadic rallies here and there. Nothing good right now on the macroeconomic front. Unemployment is still too low and supply too limited. With the sugar high of free money coming down and geopolitical conflict continue to make supply chain and inflation worse, we will be in a full blown stagflation. With too many people thinking that they are too smart to learn from history or that high inflation was transitory and you can continue to reduce unemployment to unhealthy levels (thinking it is to be cheered when it will lead to inflation that will hurt even worse), fluff the markets with excess liquidity (why not just continue to print money, they said), and not consider the supply side (whether parts, labor, etc.), the pain that this country unfortunately feel most of this year was inevitable. People may care deeply about social issues and geopolitical issues, but they will vote on how much poorer they feel now. Doesn't matter who or what was responsible. If you run on making the country better for the average person, and the average person is much worse off, they are not going to be in a mood for excuses.

I rotated to cyclicals, energy and value in 2021 but even those are now getting hurt. My advisor invested some of what I liquidated in 2021 to commodities, metals and REITs. But there is really nothing safe right now.

This is a bit like irresponsible spender who rang up their credit card bills and are now paying the price. With interest rate going up, our debt service will be just that much more expensive. The FED is a blunt instrument, inflation a tough nut to crack, and recession the only way to bring this under control.

Having said all that, I tend to invest a lot more when the market is hurting, especially when I start hearing from reports and research that one or two of the macroeconomic conditions are showing signs of improving. My closest friends and I are tracking that very closely. From my general experiences, including those here, people are more interested in politics or theory than actual facts and data, so won't share my insight real time as I have in the past. But generally, too many inexperience investors investing at the peak and not enough when it is down. While I expect the market to go down further, I expect to start investing heavily as soon as either Ukraine situation resolves, the China zero-COVID policy is amended, and inflation slows down (that will take awhile and will require a deep recession to avoid a double dip recession by easing too early) with unemployment rate is back up to a healthier level and demand meeting the supply level. Saving up a lot of dry powder from selling in early 2021.

---

I love everything about your post and would ordinarily be in complete agreement but the rally after March 2020 shook me a bit. Nothing really improved except the market, largely because the Fed came to the rescue. But it has shaken my faith in what sort of data you can use to predict when things might start to improve.

In other words, I wouldn't be surprised if the market rallies long before we hit what should be peak negative sentiment. I deployed a small amount today (my first purchase outside of 401(k) in a few years and expect to continue to drip some in as the market continues to move down. I won't be surprised by some mini rallies but do expect the market to be negative the rest of 2022.

---

I think that makes sense and depends on what your long term view is. I am in retirement so my risk profile is a bit more conservative. And it is company specific. For example in tech, do I think in 10 or 20 years, I can imagine Shopify being a 400 billion market cap. Sure. Do I see Tesla being a 8 trillion company. Not really. So, I can understanding investing in Shopify now even with a potential bear market driving it down by another 20% or so. Tesla as a short term play maybe but I have a hard time seeing high growth over the long term. Same with Roku. How big do I think streaming and advertisement to get for a company too heavily invested in hardware? But if it is a company you really like, I think valuation now makes sense since there is no way to time the market and most gains are made during short periods of time. If you try to time it, you will most likely miss out. I just need some reason to be optimistic for the near future.

---

I generally don't invest in individual public stocks. I have a few private investments (one of which recently IPO'd) but apart from that I only invest in funds. So I can't take advantage of individual opportunities. At least until my wife stops working for a firm with very strict investment rules. Wish I could get into Shopify and a few others because I do believe they are going to be great long term.

There are indications from some data points that imply that the economy is not as strong as consensus believes. Analysts have reduced 2022 forecasts for 2 weeks in a row. The downgrade is small, at less than $1.00, but not since June 2020 have they lowered estimates by such a long stretch.

This is important, because the market doesnt usually bottom convincingly until stocks stop going down on estimate/target cuts. The latter process has finally started.

An analysis by Bank of America suggests that earnings-call mentions indicate a sharp drop in business conditions, with the spread between "better" or "strong" versus "worse" or "weaker" falling to the lowest level since the second quarter of 2020. Companies' optimism also fell quarter-over-quarter, though it remains above the historical average,

calbear93 said:

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Unit2Sucks said:

---

calbear93 said:

---

Unit2Sucks said:

---

calbear93 said:

---

DiabloWags said:

---

S&P down 3.2%
NAZ down 4.3%

First close under 4000 in the S&P.
The "crash" continues.

---

I suspect the downward trend will continue for a while even with sporadic rallies here and there. Nothing good right now on the macroeconomic front. Unemployment is still too low and supply too limited. With the sugar high of free money coming down and geopolitical conflict continue to make supply chain and inflation worse, we will be in a full blown stagflation. With too many people thinking that they are too smart to learn from history or that high inflation was transitory and you can continue to reduce unemployment to unhealthy levels (thinking it is to be cheered when it will lead to inflation that will hurt even worse), fluff the markets with excess liquidity (why not just continue to print money, they said), and not consider the supply side (whether parts, labor, etc.), the pain that this country unfortunately feel most of this year was inevitable. People may care deeply about social issues and geopolitical issues, but they will vote on how much poorer they feel now. Doesn't matter who or what was responsible. If you run on making the country better for the average person, and the average person is much worse off, they are not going to be in a mood for excuses.

I rotated to cyclicals, energy and value in 2021 but even those are now getting hurt. My advisor invested some of what I liquidated in 2021 to commodities, metals and REITs. But there is really nothing safe right now.

This is a bit like irresponsible spender who rang up their credit card bills and are now paying the price. With interest rate going up, our debt service will be just that much more expensive. The FED is a blunt instrument, inflation a tough nut to crack, and recession the only way to bring this under control.

Having said all that, I tend to invest a lot more when the market is hurting, especially when I start hearing from reports and research that one or two of the macroeconomic conditions are showing signs of improving. My closest friends and I are tracking that very closely. From my general experiences, including those here, people are more interested in politics or theory than actual facts and data, so won't share my insight real time as I have in the past. But generally, too many inexperience investors investing at the peak and not enough when it is down. While I expect the market to go down further, I expect to start investing heavily as soon as either Ukraine situation resolves, the China zero-COVID policy is amended, and inflation slows down (that will take awhile and will require a deep recession to avoid a double dip recession by easing too early) with unemployment rate is back up to a healthier level and demand meeting the supply level. Saving up a lot of dry powder from selling in early 2021.

---

I love everything about your post and would ordinarily be in complete agreement but the rally after March 2020 shook me a bit. Nothing really improved except the market, largely because the Fed came to the rescue. But it has shaken my faith in what sort of data you can use to predict when things might start to improve.

In other words, I wouldn't be surprised if the market rallies long before we hit what should be peak negative sentiment. I deployed a small amount today (my first purchase outside of 401(k) in a few years and expect to continue to drip some in as the market continues to move down. I won't be surprised by some mini rallies but do expect the market to be negative the rest of 2022.

---

I think that makes sense and depends on what your long term view is. I am in retirement so my risk profile is a bit more conservative. And it is company specific. For example in tech, do I think in 10 or 20 years, I can imagine Shopify being a 400 billion market cap. Sure. Do I see Tesla being a 8 trillion company. Not really. So, I can understanding investing in Shopify now even with a potential bear market driving it down by another 20% or so. Tesla as a short term play maybe but I have a hard time seeing high growth over the long term. Same with Roku. How big do I think streaming and advertisement to get for a company too heavily invested in hardware? But if it is a company you really like, I think valuation now makes sense since there is no way to time the market and most gains are made during short periods of time. If you try to time it, you will most likely miss out. I just need some reason to be optimistic for the near future.

---

I generally don't invest in individual public stocks. I have a few private investments (one of which recently IPO'd) but apart from that I only invest in funds. So I can't take advantage of individual opportunities. At least until my wife stops working for a firm with very strict investment rules. Wish I could get into Shopify and a few others because I do believe they are going to be great long term.

---

I assume your wife is in one of the Big 4s with independence considerations.

Congratulations on one of your private investments doing an IPO. I hope you got in early and were not subject to lock-up.

I think investing in funds makes a lot of sense for many people. As an M&A and corporate finance lawyer, I loved reading financial statements, doing peer valuation comparisons, thinking about multiples and enterprise value, and considering strength of management. If I were starting now and were not in that industry, I would just invest in low cost S&P 500 index fund and set up a recurring investment through thick and thin. In the long run, equity is the best investment for people with long horizon, and S&P 500 is a great way to diversity in companies that are most likely not going to go belly up on a dime.

---

Precisely. I favor total market over S&P500 but small caps haven't done as well in the last bull market. Who knows about the next bull market but I expect to do some combo of s&p and total market.

As I've mentioned a few times private markets are a bigger part of my strategy right now but as I mature and (hopefully) obtain liquidity, that will change somewhat.

Wags - great info, thanks for posting. I love that sentiment analysis.

DiabloWags said:

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There are indications from some data points that imply that the economy is not as strong as consensus believes. Analysts have reduced 2022 forecasts for 2 weeks in a row. The downgrade is small, at less than $1.00, but not since June 2020 have they lowered estimates by such a long stretch.

This is important, because the market doesnt usually bottom convincingly until stocks stop going down on estimate/target cuts. The latter process has finally started.

An analysis by Bank of America suggests that earnings-call mentions indicate a sharp drop in business conditions, with the spread between "better" or "strong" versus "worse" or "weaker" falling to the lowest level since the second quarter of 2020. Companies' optimism also fell quarter-over-quarter, though it remains above the historical average,

---

Thanks, you're proving my point!

cbbass1 said:

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Thanks, you're proving my point!

---

Which point was that?

The one where you said that the FED was going to engineer the economy into a Recession so that the GOP would sweep midterms?

Or that the Taylor Rule was an outdated formula from the 1960's - 1970's?

Unit2Sucks said:

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calbear93 said:

---

Unit2Sucks said:

---

calbear93 said:

---

DiabloWags said:

---

S&P down 3.2%
NAZ down 4.3%

First close under 4000 in the S&P.
The "crash" continues.

---

I suspect the downward trend will continue for a while even with sporadic rallies here and there. Nothing good right now on the macroeconomic front. Unemployment is still too low and supply too limited. With the sugar high of free money coming down and geopolitical conflict continue to make supply chain and inflation worse, we will be in a full blown stagflation. With too many people thinking that they are too smart to learn from history or that high inflation was transitory and you can continue to reduce unemployment to unhealthy levels (thinking it is to be cheered when it will lead to inflation that will hurt even worse), fluff the markets with excess liquidity (why not just continue to print money, they said), and not consider the supply side (whether parts, labor, etc.), the pain that this country unfortunately feel most of this year was inevitable. People may care deeply about social issues and geopolitical issues, but they will vote on how much poorer they feel now. Doesn't matter who or what was responsible. If you run on making the country better for the average person, and the average person is much worse off, they are not going to be in a mood for excuses.

I rotated to cyclicals, energy and value in 2021 but even those are now getting hurt. My advisor invested some of what I liquidated in 2021 to commodities, metals and REITs. But there is really nothing safe right now.

This is a bit like irresponsible spender who rang up their credit card bills and are now paying the price. With interest rate going up, our debt service will be just that much more expensive. The FED is a blunt instrument, inflation a tough nut to crack, and recession the only way to bring this under control.

Having said all that, I tend to invest a lot more when the market is hurting, especially when I start hearing from reports and research that one or two of the macroeconomic conditions are showing signs of improving. My closest friends and I are tracking that very closely. From my general experiences, including those here, people are more interested in politics or theory than actual facts and data, so won't share my insight real time as I have in the past. But generally, too many inexperience investors investing at the peak and not enough when it is down. While I expect the market to go down further, I expect to start investing heavily as soon as either Ukraine situation resolves, the China zero-COVID policy is amended, and inflation slows down (that will take awhile and will require a deep recession to avoid a double dip recession by easing too early) with unemployment rate is back up to a healthier level and demand meeting the supply level. Saving up a lot of dry powder from selling in early 2021.

---

I love everything about your post and would ordinarily be in complete agreement but the rally after March 2020 shook me a bit. Nothing really improved except the market, largely because the Fed came to the rescue. But it has shaken my faith in what sort of data you can use to predict when things might start to improve.

In other words, I wouldn't be surprised if the market rallies long before we hit what should be peak negative sentiment. I deployed a small amount today (my first purchase outside of 401(k) in a few years and expect to continue to drip some in as the market continues to move down. I won't be surprised by some mini rallies but do expect the market to be negative the rest of 2022.

---

I think that makes sense and depends on what your long term view is. I am in retirement so my risk profile is a bit more conservative. And it is company specific. For example in tech, do I think in 10 or 20 years, I can imagine Shopify being a 400 billion market cap. Sure. Do I see Tesla being a 8 trillion company. Not really. So, I can understanding investing in Shopify now even with a potential bear market driving it down by another 20% or so. Tesla as a short term play maybe but I have a hard time seeing high growth over the long term. Same with Roku. How big do I think streaming and advertisement to get for a company too heavily invested in hardware? But if it is a company you really like, I think valuation now makes sense since there is no way to time the market and most gains are made during short periods of time. If you try to time it, you will most likely miss out. I just need some reason to be optimistic for the near future.

---

I generally don't invest in individual public stocks. I have a few private investments (one of which recently IPO'd) but apart from that I only invest in funds. So I can't take advantage of individual opportunities. At least until my wife stops working for a firm with very strict investment rules. Wish I could get into Shopify and a few others because I do believe they are going to be great long term.

---

Help me understand the allure of Shopify. I am not familiar with it at all other than it is an e-commerce platform that is competing with Amazon.

What does it do better than its competitors?

dimitrig said:

---

Unit2Sucks said:

---

calbear93 said:

---

Unit2Sucks said:

---

calbear93 said:

---

DiabloWags said:

---

S&P down 3.2%
NAZ down 4.3%

First close under 4000 in the S&P.
The "crash" continues.

---

I suspect the downward trend will continue for a while even with sporadic rallies here and there. Nothing good right now on the macroeconomic front. Unemployment is still too low and supply too limited. With the sugar high of free money coming down and geopolitical conflict continue to make supply chain and inflation worse, we will be in a full blown stagflation. With too many people thinking that they are too smart to learn from history or that high inflation was transitory and you can continue to reduce unemployment to unhealthy levels (thinking it is to be cheered when it will lead to inflation that will hurt even worse), fluff the markets with excess liquidity (why not just continue to print money, they said), and not consider the supply side (whether parts, labor, etc.), the pain that this country unfortunately feel most of this year was inevitable. People may care deeply about social issues and geopolitical issues, but they will vote on how much poorer they feel now. Doesn't matter who or what was responsible. If you run on making the country better for the average person, and the average person is much worse off, they are not going to be in a mood for excuses.

I rotated to cyclicals, energy and value in 2021 but even those are now getting hurt. My advisor invested some of what I liquidated in 2021 to commodities, metals and REITs. But there is really nothing safe right now.

This is a bit like irresponsible spender who rang up their credit card bills and are now paying the price. With interest rate going up, our debt service will be just that much more expensive. The FED is a blunt instrument, inflation a tough nut to crack, and recession the only way to bring this under control.

Having said all that, I tend to invest a lot more when the market is hurting, especially when I start hearing from reports and research that one or two of the macroeconomic conditions are showing signs of improving. My closest friends and I are tracking that very closely. From my general experiences, including those here, people are more interested in politics or theory than actual facts and data, so won't share my insight real time as I have in the past. But generally, too many inexperience investors investing at the peak and not enough when it is down. While I expect the market to go down further, I expect to start investing heavily as soon as either Ukraine situation resolves, the China zero-COVID policy is amended, and inflation slows down (that will take awhile and will require a deep recession to avoid a double dip recession by easing too early) with unemployment rate is back up to a healthier level and demand meeting the supply level. Saving up a lot of dry powder from selling in early 2021.

---

I love everything about your post and would ordinarily be in complete agreement but the rally after March 2020 shook me a bit. Nothing really improved except the market, largely because the Fed came to the rescue. But it has shaken my faith in what sort of data you can use to predict when things might start to improve.

In other words, I wouldn't be surprised if the market rallies long before we hit what should be peak negative sentiment. I deployed a small amount today (my first purchase outside of 401(k) in a few years and expect to continue to drip some in as the market continues to move down. I won't be surprised by some mini rallies but do expect the market to be negative the rest of 2022.

---

I think that makes sense and depends on what your long term view is. I am in retirement so my risk profile is a bit more conservative. And it is company specific. For example in tech, do I think in 10 or 20 years, I can imagine Shopify being a 400 billion market cap. Sure. Do I see Tesla being a 8 trillion company. Not really. So, I can understanding investing in Shopify now even with a potential bear market driving it down by another 20% or so. Tesla as a short term play maybe but I have a hard time seeing high growth over the long term. Same with Roku. How big do I think streaming and advertisement to get for a company too heavily invested in hardware? But if it is a company you really like, I think valuation now makes sense since there is no way to time the market and most gains are made during short periods of time. If you try to time it, you will most likely miss out. I just need some reason to be optimistic for the near future.

---

I generally don't invest in individual public stocks. I have a few private investments (one of which recently IPO'd) but apart from that I only invest in funds. So I can't take advantage of individual opportunities. At least until my wife stops working for a firm with very strict investment rules. Wish I could get into Shopify and a few others because I do believe they are going to be great long term.

---

Help me understand the allure of Shopify. I am not familiar with it at all other than it is an e-commerce platform that is competing with Amazon.

What does it do better than its competitors?

---

I'd be curious to know that too. I'm not familiar with Shopify, so I went to shopify.com and found nothing but pledges to "Create an ecommerce website backed by powerful tools that help you find customers, drive sales, and manage your day-to-day." As a customer, I'm not looking for that. I couldn't see a way to go search for things I might want. I'm sure it must be something where I have to jump through a few hoops first, but unless I have a compelling reason to do so, I would probably be turned off by the non-intuitive process and just go to Amazon instead. I imagine others would do the same. Maybe when I have a bit more time than now, I'll dig a little deeper into how to shop on Shopify.

Shopify powers independent e-commerce websites. So they aren't a retail site but a SaaS platform that thousands of retailers use to run their ebusinesses. If you see a lot of commonality between e-commerce sites and know what to look for you will be able to tell which ones are running on Shopify.

In short, Shopify is dominant in its space and if you want to bet on e-commerce long term without having to pick specialty retail categories or individual stocks, Shopify is the best play. That and Stripe, still private for now, are the best proxies for internet commerce.

Eastern Oregon Bear said:

---

dimitrig said:

---

Unit2Sucks said:

---

calbear93 said:

---

Unit2Sucks said:

---

calbear93 said:

---

DiabloWags said:

---

S&P down 3.2%
NAZ down 4.3%

First close under 4000 in the S&P.
The "crash" continues.

---

I suspect the downward trend will continue for a while even with sporadic rallies here and there. Nothing good right now on the macroeconomic front. Unemployment is still too low and supply too limited. With the sugar high of free money coming down and geopolitical conflict continue to make supply chain and inflation worse, we will be in a full blown stagflation. With too many people thinking that they are too smart to learn from history or that high inflation was transitory and you can continue to reduce unemployment to unhealthy levels (thinking it is to be cheered when it will lead to inflation that will hurt even worse), fluff the markets with excess liquidity (why not just continue to print money, they said), and not consider the supply side (whether parts, labor, etc.), the pain that this country unfortunately feel most of this year was inevitable. People may care deeply about social issues and geopolitical issues, but they will vote on how much poorer they feel now. Doesn't matter who or what was responsible. If you run on making the country better for the average person, and the average person is much worse off, they are not going to be in a mood for excuses.

I rotated to cyclicals, energy and value in 2021 but even those are now getting hurt. My advisor invested some of what I liquidated in 2021 to commodities, metals and REITs. But there is really nothing safe right now.

This is a bit like irresponsible spender who rang up their credit card bills and are now paying the price. With interest rate going up, our debt service will be just that much more expensive. The FED is a blunt instrument, inflation a tough nut to crack, and recession the only way to bring this under control.

Having said all that, I tend to invest a lot more when the market is hurting, especially when I start hearing from reports and research that one or two of the macroeconomic conditions are showing signs of improving. My closest friends and I are tracking that very closely. From my general experiences, including those here, people are more interested in politics or theory than actual facts and data, so won't share my insight real time as I have in the past. But generally, too many inexperience investors investing at the peak and not enough when it is down. While I expect the market to go down further, I expect to start investing heavily as soon as either Ukraine situation resolves, the China zero-COVID policy is amended, and inflation slows down (that will take awhile and will require a deep recession to avoid a double dip recession by easing too early) with unemployment rate is back up to a healthier level and demand meeting the supply level. Saving up a lot of dry powder from selling in early 2021.

---

I love everything about your post and would ordinarily be in complete agreement but the rally after March 2020 shook me a bit. Nothing really improved except the market, largely because the Fed came to the rescue. But it has shaken my faith in what sort of data you can use to predict when things might start to improve.

In other words, I wouldn't be surprised if the market rallies long before we hit what should be peak negative sentiment. I deployed a small amount today (my first purchase outside of 401(k) in a few years and expect to continue to drip some in as the market continues to move down. I won't be surprised by some mini rallies but do expect the market to be negative the rest of 2022.

---

I think that makes sense and depends on what your long term view is. I am in retirement so my risk profile is a bit more conservative. And it is company specific. For example in tech, do I think in 10 or 20 years, I can imagine Shopify being a 400 billion market cap. Sure. Do I see Tesla being a 8 trillion company. Not really. So, I can understanding investing in Shopify now even with a potential bear market driving it down by another 20% or so. Tesla as a short term play maybe but I have a hard time seeing high growth over the long term. Same with Roku. How big do I think streaming and advertisement to get for a company too heavily invested in hardware? But if it is a company you really like, I think valuation now makes sense since there is no way to time the market and most gains are made during short periods of time. If you try to time it, you will most likely miss out. I just need some reason to be optimistic for the near future.

---

I generally don't invest in individual public stocks. I have a few private investments (one of which recently IPO'd) but apart from that I only invest in funds. So I can't take advantage of individual opportunities. At least until my wife stops working for a firm with very strict investment rules. Wish I could get into Shopify and a few others because I do believe they are going to be great long term.

---

Help me understand the allure of Shopify. I am not familiar with it at all other than it is an e-commerce platform that is competing with Amazon.

What does it do better than its competitors?

---

I'd be curious to know that too. I'm not familiar with Shopify, so I went to shopify.com and found nothing but pledges to "Create an ecommerce website backed by powerful tools that help you find customers, drive sales, and manage your day-to-day." As a customer, I'm not looking for that. I couldn't see a way to go search for things I might want. I'm sure it must be something where I have to jump through a few hoops first, but unless I have a compelling reason to do so, I would probably be turned off by the non-intuitive process and just go to Amazon instead. I imagine others would do the same. Maybe when I have a bit more time than now, I'll dig a little deeper into how to shop on Shopify.

---

Shopify provides a platform for the sellers to use. The buyers interact with it indirectly. They take a cut of the transaction by offering payment processing and point-of-sale and also assist with things like advertising and branding.

However, I'm not really understanding what they offer to small businesses that Amazon Marketplace doesn't.

This link tries to highlight some of the differences:

Shopify vs. Amazon: An In-Depth Comparison

I am not sure I see that the barrier to competitors to Shopify is very high. I myself worked for a Shopify-like startup back in the mid-1990s so this concept has been kicking around a long time.

Why is Shopify going to be the one to knock Amazon off its perch?

Chuck Grassley has joined team, "corporations are price gouging"

Q2 report shows Tyson raking in $$ by raising price of beef nearly 25% Yet cattle producers in Iowa r not getting higher prices 4 their cattle + consumers face higher grocery prices Big meat packers continue profiting while farmers lose out We need price transparency NOW

— ChuckGrassley (@ChuckGrassley) May 9, 2022

dimitrig said:

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Eastern Oregon Bear said:

---

dimitrig said:

---

Unit2Sucks said:

---

calbear93 said:

---

Unit2Sucks said:

---

calbear93 said:

---

DiabloWags said:

---

S&P down 3.2%
NAZ down 4.3%

First close under 4000 in the S&P.
The "crash" continues.

---

I suspect the downward trend will continue for a while even with sporadic rallies here and there. Nothing good right now on the macroeconomic front. Unemployment is still too low and supply too limited. With the sugar high of free money coming down and geopolitical conflict continue to make supply chain and inflation worse, we will be in a full blown stagflation. With too many people thinking that they are too smart to learn from history or that high inflation was transitory and you can continue to reduce unemployment to unhealthy levels (thinking it is to be cheered when it will lead to inflation that will hurt even worse), fluff the markets with excess liquidity (why not just continue to print money, they said), and not consider the supply side (whether parts, labor, etc.), the pain that this country unfortunately feel most of this year was inevitable. People may care deeply about social issues and geopolitical issues, but they will vote on how much poorer they feel now. Doesn't matter who or what was responsible. If you run on making the country better for the average person, and the average person is much worse off, they are not going to be in a mood for excuses.

I rotated to cyclicals, energy and value in 2021 but even those are now getting hurt. My advisor invested some of what I liquidated in 2021 to commodities, metals and REITs. But there is really nothing safe right now.

This is a bit like irresponsible spender who rang up their credit card bills and are now paying the price. With interest rate going up, our debt service will be just that much more expensive. The FED is a blunt instrument, inflation a tough nut to crack, and recession the only way to bring this under control.

Having said all that, I tend to invest a lot more when the market is hurting, especially when I start hearing from reports and research that one or two of the macroeconomic conditions are showing signs of improving. My closest friends and I are tracking that very closely. From my general experiences, including those here, people are more interested in politics or theory than actual facts and data, so won't share my insight real time as I have in the past. But generally, too many inexperience investors investing at the peak and not enough when it is down. While I expect the market to go down further, I expect to start investing heavily as soon as either Ukraine situation resolves, the China zero-COVID policy is amended, and inflation slows down (that will take awhile and will require a deep recession to avoid a double dip recession by easing too early) with unemployment rate is back up to a healthier level and demand meeting the supply level. Saving up a lot of dry powder from selling in early 2021.

---

I love everything about your post and would ordinarily be in complete agreement but the rally after March 2020 shook me a bit. Nothing really improved except the market, largely because the Fed came to the rescue. But it has shaken my faith in what sort of data you can use to predict when things might start to improve.

In other words, I wouldn't be surprised if the market rallies long before we hit what should be peak negative sentiment. I deployed a small amount today (my first purchase outside of 401(k) in a few years and expect to continue to drip some in as the market continues to move down. I won't be surprised by some mini rallies but do expect the market to be negative the rest of 2022.

---

I think that makes sense and depends on what your long term view is. I am in retirement so my risk profile is a bit more conservative. And it is company specific. For example in tech, do I think in 10 or 20 years, I can imagine Shopify being a 400 billion market cap. Sure. Do I see Tesla being a 8 trillion company. Not really. So, I can understanding investing in Shopify now even with a potential bear market driving it down by another 20% or so. Tesla as a short term play maybe but I have a hard time seeing high growth over the long term. Same with Roku. How big do I think streaming and advertisement to get for a company too heavily invested in hardware? But if it is a company you really like, I think valuation now makes sense since there is no way to time the market and most gains are made during short periods of time. If you try to time it, you will most likely miss out. I just need some reason to be optimistic for the near future.

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I generally don't invest in individual public stocks. I have a few private investments (one of which recently IPO'd) but apart from that I only invest in funds. So I can't take advantage of individual opportunities. At least until my wife stops working for a firm with very strict investment rules. Wish I could get into Shopify and a few others because I do believe they are going to be great long term.

---

Help me understand the allure of Shopify. I am not familiar with it at all other than it is an e-commerce platform that is competing with Amazon.

What does it do better than its competitors?

---

I'd be curious to know that too. I'm not familiar with Shopify, so I went to shopify.com and found nothing but pledges to "Create an ecommerce website backed by powerful tools that help you find customers, drive sales, and manage your day-to-day." As a customer, I'm not looking for that. I couldn't see a way to go search for things I might want. I'm sure it must be something where I have to jump through a few hoops first, but unless I have a compelling reason to do so, I would probably be turned off by the non-intuitive process and just go to Amazon instead. I imagine others would do the same. Maybe when I have a bit more time than now, I'll dig a little deeper into how to shop on Shopify.

---

Shopify provides a platform for the sellers to use. The buyers interact with it indirectly. They take a cut of the transaction by offering payment processing and point-of-sale and also assist with things like advertising and branding.

However, I'm not really understanding what they offer to small businesses that Amazon Marketplace doesn't.

This link tries to highlight some of the differences:

Shopify vs. Amazon: An In-Depth Comparison

I am not sure I see that the barrier to competitors to Shopify is very high. I myself worked for a Shopify-like startup back in the mid-1990s so this concept has been kicking around a long time.

Why is Shopify going to be the one to knock Amazon off its perch?

---

Shopify isn't just for small businesses - lots of real e-commerce businesses use it as well. There are a number of digitally native specialty retailers that don't need to develop and maintain full on e-commerce infrastructure and are happy to have Shopify's system powering their business.

If you're ever seen a checkout page like this, you are using Shopify.

I can see the argument that Shopify will displace the stand-alone payment gateways. Maybe they already have. The confluence of technical and legal issues in ecommerce has always made full redirect an appealing option. With better style matching capabilities that appeal only increases. They must be banking on companies feeling full redirects are ok with customers and it's just easier and cheaper to outsource ecommerce and internally staff management of those stores with low-tech employees rather than employing a team of devs to maintain their own store / payment gateway integration. Shopify charges a nominal subscription fee for all of that on top of transaction fees, so it's probably pretty appealing to some.

But Amazon is a different beast it seems. With Amazon you're leveraging their brand recognition, traffic, and market share. You have a store "on" Amazon.com. That's relatively obvious, and the appeal for customers and vendors. (I know I always check the product sourcing.) With Shopify it's your website, your brand recognition, your traffic. You're just paying SaaS fees to outsource the coding and compliance difficulties that come with ecommerce and redirect your customers there to enter credit info. In that respect it's like comparing a Wix or Squarespace website to a full-stack JS or even Drupal/Wordpress site. But from a reach perspective comparing Amazon Marketplace storefront product listing impressions to those served by your own Shopify website is like comparing Google ad results to Yahoo or Bing organic results. No question which one is seen by more eyeballs daily. Honestly I can see an argument for having both, at least unless/until Amazon's dominance wanes in general. Maybe the best example of this is Whole Foods being a Shopify customer.

WalterSobchak said:

---

I can see the argument that Shopify will displace the stand-alone payment gateways. Maybe they already have. The confluence of technical and legal issues in ecommerce has always made full redirect an appealing option. With better style matching capabilities that appeal only increases. They must be banking on companies feeling full redirects are ok with customers and it's just easier and cheaper to outsource ecommerce and internally staff management of those stores with low-tech employees rather than employing a team of devs to maintain their own store / payment gateway. Shopify charges a nominal subscription fee for all of that on top of transaction fees, so it's probably pretty appealing to some.

But Amazon is a different beast it seems. With Amazon you're leveraging their brand recognition, traffic, and market share. You have a store "on" Amazon.com. That's relatively obvious, and the appeal for customers and vendors. (I know I always check the product sourcing.) With Shopify it's your website, your brand recognition, your traffic. You're just paying SaaS fees to outsource the coding and compliance difficulties that come with ecommerce and redirect your customers there to enter credit info. In that respect it's like comparing a Wix or Squarespace website to a full-stack JS or even Drupal/Wordpress site. But from a reach perspective comparing Amazon Marketplace storefront product listing impressions to those served by your own Shopify website is like comparing Google ad results to Yahoo or Bing organic results. No question which one is seen by more eyeballs daily. Honestly I can see an argument for having both, at least unless/until Amazon's dominance wanes in general. Maybe the best example of this is Whole Foods being a Shopify customer.

---

Less than 50% of e-commerce is done on Amazon and E-bay. Clearly there is a market for other e-commerce platforms.

WalterSobchak said:

---

I can see the argument that Shopify will displace the stand-alone payment gateways. Maybe they already have. The confluence of technical and legal issues in ecommerce has always made full redirect an appealing option. With better style matching capabilities that appeal only increases. They must be banking on companies feeling full redirects are ok with customers and it's just easier and cheaper to outsource ecommerce and internally staff management of those stores with low-tech employees rather than employing a team of devs to maintain their own store / payment gateway. Shopify charges a nominal subscription fee for all of that on top of transaction fees, so it's probably pretty appealing to some.

But Amazon is a different beast it seems. With Amazon you're leveraging their brand recognition, traffic, and market share. You have a store "on" Amazon.com. That's relatively obvious, and the appeal for customers and vendors. (I know I always check the product sourcing.) With Shopify it's your website, your brand recognition, your traffic. You're just paying SaaS fees to outsource the coding and compliance difficulties that come with ecommerce and redirect your customers there to enter credit info. In that respect it's like comparing a Wix or Squarespace website to a full-stack JS or even Drupal/Wordpress site. But from a reach perspective comparing Amazon Marketplace storefront product listing impressions to those served by your own Shopify website is like comparing Google ad results to Yahoo or Bing organic results. No question which one is seen by more eyeballs daily. Honestly I can see an argument for having both, at least unless/until Amazon's dominance wanes in general. Maybe the best example of this is Whole Foods being a Shopify customer.

---

Yeah, I don't think of Amazon as an alternative to Shopify. It's almost a different channel with its own customer acquisition costs and expenses. Lots of companies sell through their own ecommerce sites (built on Shopify) as well as through Amazon either as a retailer, as FBA or marketplace. They also sell directly on eBay. Shopify doesn't have to be as big as Amazon to be successful - it's a higher margin business and can be a big company even without winning. I don't think Amazon's market power takes anything away from Shopify - it certainly hasn't stopped Shopify from becoming a huge business over the last decade. They made $4.6B in revenue in 2021, a 57% increase over 2020 with 55% gross margins and it's trading at less than 6x consensus 2022 revenues. I wouldn't be surprised to see it drop some more but it's going to be a $100B company again within a few years.

oski003 said:

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WalterSobchak said:

---

I can see the argument that Shopify will displace the stand-alone payment gateways. Maybe they already have. The confluence of technical and legal issues in ecommerce has always made full redirect an appealing option. With better style matching capabilities that appeal only increases. They must be banking on companies feeling full redirects are ok with customers and it's just easier and cheaper to outsource ecommerce and internally staff management of those stores with low-tech employees rather than employing a team of devs to maintain their own store / payment gateway. Shopify charges a nominal subscription fee for all of that on top of transaction fees, so it's probably pretty appealing to some.

But Amazon is a different beast it seems. With Amazon you're leveraging their brand recognition, traffic, and market share. You have a store "on" Amazon.com. That's relatively obvious, and the appeal for customers and vendors. (I know I always check the product sourcing.) With Shopify it's your website, your brand recognition, your traffic. You're just paying SaaS fees to outsource the coding and compliance difficulties that come with ecommerce and redirect your customers there to enter credit info. In that respect it's like comparing a Wix or Squarespace website to a full-stack JS or even Drupal/Wordpress site. But from a reach perspective comparing Amazon Marketplace storefront product listing impressions to those served by your own Shopify website is like comparing Google ad results to Yahoo or Bing organic results. No question which one is seen by more eyeballs daily. Honestly I can see an argument for having both, at least unless/until Amazon's dominance wanes in general. Maybe the best example of this is Whole Foods being a Shopify customer.

---

Less than 50% of e-commerce is done on Amazon and E-bay. Clearly there is a market for other e-commerce platforms.

---

Sure, but why Shopify? What is their secret sauce?

Amazon 41%
Walmart 6.6%
eBay 4.2%
Apple 4%
The Home Depot 2.2%
Target 2%
Best Buy 1.8%
Costco 1.6%
Kroger 1.4%
Wayfair 1.3%
Chewy 1%
Etsy 0.9%

Sorry I guess I forgot this was a stock thread and got sucked in by the Shopify / Amazon comparison. Yeah their growth has been crazy. No disagreement there.

dimitrig said:

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oski003 said:

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WalterSobchak said:

---

I can see the argument that Shopify will displace the stand-alone payment gateways. Maybe they already have. The confluence of technical and legal issues in ecommerce has always made full redirect an appealing option. With better style matching capabilities that appeal only increases. They must be banking on companies feeling full redirects are ok with customers and it's just easier and cheaper to outsource ecommerce and internally staff management of those stores with low-tech employees rather than employing a team of devs to maintain their own store / payment gateway. Shopify charges a nominal subscription fee for all of that on top of transaction fees, so it's probably pretty appealing to some.

But Amazon is a different beast it seems. With Amazon you're leveraging their brand recognition, traffic, and market share. You have a store "on" Amazon.com. That's relatively obvious, and the appeal for customers and vendors. (I know I always check the product sourcing.) With Shopify it's your website, your brand recognition, your traffic. You're just paying SaaS fees to outsource the coding and compliance difficulties that come with ecommerce and redirect your customers there to enter credit info. In that respect it's like comparing a Wix or Squarespace website to a full-stack JS or even Drupal/Wordpress site. But from a reach perspective comparing Amazon Marketplace storefront product listing impressions to those served by your own Shopify website is like comparing Google ad results to Yahoo or Bing organic results. No question which one is seen by more eyeballs daily. Honestly I can see an argument for having both, at least unless/until Amazon's dominance wanes in general. Maybe the best example of this is Whole Foods being a Shopify customer.

---

Less than 50% of e-commerce is done on Amazon and E-bay. Clearly there is a market for other e-commerce platforms.

---

Sure, but why Shopify? What is their secret sauce?

Amazon 41%
Walmart 6.6%
eBay 4.2%
Apple 4%
The Home Depot 2.2%
Target 2%
Best Buy 1.8%
Costco 1.6%
Kroger 1.4%
Wayfair 1.3%
Chewy 1%
Etsy 0.9%

---

Being better than Magento? (A low bar if ever there was one.)
Honestly when Shopify started the options were pretty bleak, and the more technically challenging JS embeds from the payment gateways were technically in violation of PCI-DSS. I think they got first mover status simply by being the easiest to style to make look the most like your own site to fool customers into thinking they never left. Their success will undoubtedly spawn a host of new competitors, then maybe we'll know.

WalterSobchak said:

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Sorry I guess I forgot this was a stock thread and got sucked in by the Shopify / Amazon comparison. Yeah their growth has been crazy. No disagreement there.

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Growth was influenced by the pandemic and seems to be slowing.

dimitrig said:

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oski003 said:

---

WalterSobchak said:

---

I can see the argument that Shopify will displace the stand-alone payment gateways. Maybe they already have. The confluence of technical and legal issues in ecommerce has always made full redirect an appealing option. With better style matching capabilities that appeal only increases. They must be banking on companies feeling full redirects are ok with customers and it's just easier and cheaper to outsource ecommerce and internally staff management of those stores with low-tech employees rather than employing a team of devs to maintain their own store / payment gateway. Shopify charges a nominal subscription fee for all of that on top of transaction fees, so it's probably pretty appealing to some.

But Amazon is a different beast it seems. With Amazon you're leveraging their brand recognition, traffic, and market share. You have a store "on" Amazon.com. That's relatively obvious, and the appeal for customers and vendors. (I know I always check the product sourcing.) With Shopify it's your website, your brand recognition, your traffic. You're just paying SaaS fees to outsource the coding and compliance difficulties that come with ecommerce and redirect your customers there to enter credit info. In that respect it's like comparing a Wix or Squarespace website to a full-stack JS or even Drupal/Wordpress site. But from a reach perspective comparing Amazon Marketplace storefront product listing impressions to those served by your own Shopify website is like comparing Google ad results to Yahoo or Bing organic results. No question which one is seen by more eyeballs daily. Honestly I can see an argument for having both, at least unless/until Amazon's dominance wanes in general. Maybe the best example of this is Whole Foods being a Shopify customer.

---

Less than 50% of e-commerce is done on Amazon and E-bay. Clearly there is a market for other e-commerce platforms.

---

Sure, but why Shopify? What is their secret sauce?

Amazon 41%
Walmart 6.6%
eBay 4.2%
Apple 4%
The Home Depot 2.2%
Target 2%
Best Buy 1.8%
Costco 1.6%
Kroger 1.4%
Wayfair 1.3%
Chewy 1%
Etsy 0.9%

---

Those are mostly not relevant comps. Etsy, eBay and, to an extent, Amazon are the only potentially relevant ones with respect to their marketplace businesses. The rest (save Apple) are retailers with relatively low gross margins whereas Shopify is a SaaS and payments business with high and growing GMs.

If you want to make a comparison between the revenue of those retailers and Shopify, you should look at the GMV (gross merchandise value) for sales on Shopify's platform. For 2021 that number was north of $175 Billion. Does that change the way you feel?

WalterSobchak said:

---

dimitrig said:

---

oski003 said:

---

WalterSobchak said:

---

I can see the argument that Shopify will displace the stand-alone payment gateways. Maybe they already have. The confluence of technical and legal issues in ecommerce has always made full redirect an appealing option. With better style matching capabilities that appeal only increases. They must be banking on companies feeling full redirects are ok with customers and it's just easier and cheaper to outsource ecommerce and internally staff management of those stores with low-tech employees rather than employing a team of devs to maintain their own store / payment gateway. Shopify charges a nominal subscription fee for all of that on top of transaction fees, so it's probably pretty appealing to some.

But Amazon is a different beast it seems. With Amazon you're leveraging their brand recognition, traffic, and market share. You have a store "on" Amazon.com. That's relatively obvious, and the appeal for customers and vendors. (I know I always check the product sourcing.) With Shopify it's your website, your brand recognition, your traffic. You're just paying SaaS fees to outsource the coding and compliance difficulties that come with ecommerce and redirect your customers there to enter credit info. In that respect it's like comparing a Wix or Squarespace website to a full-stack JS or even Drupal/Wordpress site. But from a reach perspective comparing Amazon Marketplace storefront product listing impressions to those served by your own Shopify website is like comparing Google ad results to Yahoo or Bing organic results. No question which one is seen by more eyeballs daily. Honestly I can see an argument for having both, at least unless/until Amazon's dominance wanes in general. Maybe the best example of this is Whole Foods being a Shopify customer.

---

Less than 50% of e-commerce is done on Amazon and E-bay. Clearly there is a market for other e-commerce platforms.

---

Sure, but why Shopify? What is their secret sauce?

Amazon 41%
Walmart 6.6%
eBay 4.2%
Apple 4%
The Home Depot 2.2%
Target 2%
Best Buy 1.8%
Costco 1.6%
Kroger 1.4%
Wayfair 1.3%
Chewy 1%
Etsy 0.9%

---

Being better than Magento? (A low bar if ever there was one.)
Honestly when Shopify started the options were pretty bleak, and the more technically challenging JS embeds from the payment gateways were technically in violation of PCI-DSS. I think they got first mover status simply by being the easiest to style to make look the most like your own site to fool customers into thinking they never left. Their success will undoubtedly spawn a host of new competitors, then maybe we'll know.

---

Budweiser, Pepsi, Nestle, Tesla, and Louis Vuitton all use Shopify.

Unit2Sucks said:

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dimitrig said:

---

oski003 said:

---

WalterSobchak said:

---

I can see the argument that Shopify will displace the stand-alone payment gateways. Maybe they already have. The confluence of technical and legal issues in ecommerce has always made full redirect an appealing option. With better style matching capabilities that appeal only increases. They must be banking on companies feeling full redirects are ok with customers and it's just easier and cheaper to outsource ecommerce and internally staff management of those stores with low-tech employees rather than employing a team of devs to maintain their own store / payment gateway. Shopify charges a nominal subscription fee for all of that on top of transaction fees, so it's probably pretty appealing to some.

But Amazon is a different beast it seems. With Amazon you're leveraging their brand recognition, traffic, and market share. You have a store "on" Amazon.com. That's relatively obvious, and the appeal for customers and vendors. (I know I always check the product sourcing.) With Shopify it's your website, your brand recognition, your traffic. You're just paying SaaS fees to outsource the coding and compliance difficulties that come with ecommerce and redirect your customers there to enter credit info. In that respect it's like comparing a Wix or Squarespace website to a full-stack JS or even Drupal/Wordpress site. But from a reach perspective comparing Amazon Marketplace storefront product listing impressions to those served by your own Shopify website is like comparing Google ad results to Yahoo or Bing organic results. No question which one is seen by more eyeballs daily. Honestly I can see an argument for having both, at least unless/until Amazon's dominance wanes in general. Maybe the best example of this is Whole Foods being a Shopify customer.

---

Less than 50% of e-commerce is done on Amazon and E-bay. Clearly there is a market for other e-commerce platforms.

---

Sure, but why Shopify? What is their secret sauce?

Amazon 41%
Walmart 6.6%
eBay 4.2%
Apple 4%
The Home Depot 2.2%
Target 2%
Best Buy 1.8%
Costco 1.6%
Kroger 1.4%
Wayfair 1.3%
Chewy 1%
Etsy 0.9%

---

Those are mostly not relevant comps. Etsy, eBay and, to an extent, Amazon are the only potentially relevant ones with respect to their marketplace businesses. The rest (save Apple) are retailers with relatively low gross margins whereas Shopify is a SaaS and payments business with high and growing GMs.

If you want to make a comparison between the revenue of those retailers and Shopify, you should look at the GMV (gross merchandise value) for sales on Shopify's platform. For 2021 that number was north of $175 Billion. Does that change the way you feel?

---

I wasn't really making comps. I was just showing what percentage of the retail space is not already claimed.

dimitrig said:

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Unit2Sucks said:

---

dimitrig said:

---

oski003 said:

---

WalterSobchak said:

---

I can see the argument that Shopify will displace the stand-alone payment gateways. Maybe they already have. The confluence of technical and legal issues in ecommerce has always made full redirect an appealing option. With better style matching capabilities that appeal only increases. They must be banking on companies feeling full redirects are ok with customers and it's just easier and cheaper to outsource ecommerce and internally staff management of those stores with low-tech employees rather than employing a team of devs to maintain their own store / payment gateway. Shopify charges a nominal subscription fee for all of that on top of transaction fees, so it's probably pretty appealing to some.

But Amazon is a different beast it seems. With Amazon you're leveraging their brand recognition, traffic, and market share. You have a store "on" Amazon.com. That's relatively obvious, and the appeal for customers and vendors. (I know I always check the product sourcing.) With Shopify it's your website, your brand recognition, your traffic. You're just paying SaaS fees to outsource the coding and compliance difficulties that come with ecommerce and redirect your customers there to enter credit info. In that respect it's like comparing a Wix or Squarespace website to a full-stack JS or even Drupal/Wordpress site. But from a reach perspective comparing Amazon Marketplace storefront product listing impressions to those served by your own Shopify website is like comparing Google ad results to Yahoo or Bing organic results. No question which one is seen by more eyeballs daily. Honestly I can see an argument for having both, at least unless/until Amazon's dominance wanes in general. Maybe the best example of this is Whole Foods being a Shopify customer.

---

Less than 50% of e-commerce is done on Amazon and E-bay. Clearly there is a market for other e-commerce platforms.

---

Sure, but why Shopify? What is their secret sauce?

Amazon 41%
Walmart 6.6%
eBay 4.2%
Apple 4%
The Home Depot 2.2%
Target 2%
Best Buy 1.8%
Costco 1.6%
Kroger 1.4%
Wayfair 1.3%
Chewy 1%
Etsy 0.9%

---

Those are mostly not relevant comps. Etsy, eBay and, to an extent, Amazon are the only potentially relevant ones with respect to their marketplace businesses. The rest (save Apple) are retailers with relatively low gross margins whereas Shopify is a SaaS and payments business with high and growing GMs.

If you want to make a comparison between the revenue of those retailers and Shopify, you should look at the GMV (gross merchandise value) for sales on Shopify's platform. For 2021 that number was north of $175 Billion. Does that change the way you feel?

---

I wasn't really making comps. I was just showing what percentage of the retail space is not already claimed.

---

Shopify has bigger e-commerce market share than all of them except Amazon so I'm still not sure I see the relevance. It's also growing faster because its customers tend to be higher growth than the big standalone e-commerce businesses.

dimitrig said:

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Eastern Oregon Bear said:

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dimitrig said:

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Unit2Sucks said:

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calbear93 said:

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Unit2Sucks said:

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calbear93 said:

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DiabloWags said:

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S&P down 3.2%
NAZ down 4.3%

First close under 4000 in the S&P.
The "crash" continues.

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I suspect the downward trend will continue for a while even with sporadic rallies here and there. Nothing good right now on the macroeconomic front. Unemployment is still too low and supply too limited. With the sugar high of free money coming down and geopolitical conflict continue to make supply chain and inflation worse, we will be in a full blown stagflation. With too many people thinking that they are too smart to learn from history or that high inflation was transitory and you can continue to reduce unemployment to unhealthy levels (thinking it is to be cheered when it will lead to inflation that will hurt even worse), fluff the markets with excess liquidity (why not just continue to print money, they said), and not consider the supply side (whether parts, labor, etc.), the pain that this country unfortunately feel most of this year was inevitable. People may care deeply about social issues and geopolitical issues, but they will vote on how much poorer they feel now. Doesn't matter who or what was responsible. If you run on making the country better for the average person, and the average person is much worse off, they are not going to be in a mood for excuses.

I rotated to cyclicals, energy and value in 2021 but even those are now getting hurt. My advisor invested some of what I liquidated in 2021 to commodities, metals and REITs. But there is really nothing safe right now.

This is a bit like irresponsible spender who rang up their credit card bills and are now paying the price. With interest rate going up, our debt service will be just that much more expensive. The FED is a blunt instrument, inflation a tough nut to crack, and recession the only way to bring this under control.

Having said all that, I tend to invest a lot more when the market is hurting, especially when I start hearing from reports and research that one or two of the macroeconomic conditions are showing signs of improving. My closest friends and I are tracking that very closely. From my general experiences, including those here, people are more interested in politics or theory than actual facts and data, so won't share my insight real time as I have in the past. But generally, too many inexperience investors investing at the peak and not enough when it is down. While I expect the market to go down further, I expect to start investing heavily as soon as either Ukraine situation resolves, the China zero-COVID policy is amended, and inflation slows down (that will take awhile and will require a deep recession to avoid a double dip recession by easing too early) with unemployment rate is back up to a healthier level and demand meeting the supply level. Saving up a lot of dry powder from selling in early 2021.

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I love everything about your post and would ordinarily be in complete agreement but the rally after March 2020 shook me a bit. Nothing really improved except the market, largely because the Fed came to the rescue. But it has shaken my faith in what sort of data you can use to predict when things might start to improve.

In other words, I wouldn't be surprised if the market rallies long before we hit what should be peak negative sentiment. I deployed a small amount today (my first purchase outside of 401(k) in a few years and expect to continue to drip some in as the market continues to move down. I won't be surprised by some mini rallies but do expect the market to be negative the rest of 2022.

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I think that makes sense and depends on what your long term view is. I am in retirement so my risk profile is a bit more conservative. And it is company specific. For example in tech, do I think in 10 or 20 years, I can imagine Shopify being a 400 billion market cap. Sure. Do I see Tesla being a 8 trillion company. Not really. So, I can understanding investing in Shopify now even with a potential bear market driving it down by another 20% or so. Tesla as a short term play maybe but I have a hard time seeing high growth over the long term. Same with Roku. How big do I think streaming and advertisement to get for a company too heavily invested in hardware? But if it is a company you really like, I think valuation now makes sense since there is no way to time the market and most gains are made during short periods of time. If you try to time it, you will most likely miss out. I just need some reason to be optimistic for the near future.

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I generally don't invest in individual public stocks. I have a few private investments (one of which recently IPO'd) but apart from that I only invest in funds. So I can't take advantage of individual opportunities. At least until my wife stops working for a firm with very strict investment rules. Wish I could get into Shopify and a few others because I do believe they are going to be great long term.

---

Help me understand the allure of Shopify. I am not familiar with it at all other than it is an e-commerce platform that is competing with Amazon.

What does it do better than its competitors?

---

I'd be curious to know that too. I'm not familiar with Shopify, so I went to shopify.com and found nothing but pledges to "Create an ecommerce website backed by powerful tools that help you find customers, drive sales, and manage your day-to-day." As a customer, I'm not looking for that. I couldn't see a way to go search for things I might want. I'm sure it must be something where I have to jump through a few hoops first, but unless I have a compelling reason to do so, I would probably be turned off by the non-intuitive process and just go to Amazon instead. I imagine others would do the same. Maybe when I have a bit more time than now, I'll dig a little deeper into how to shop on Shopify.

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Shopify provides a platform for the sellers to use. The buyers interact with it indirectly. They take a cut of the transaction by offering payment processing and point-of-sale and also assist with things like advertising and branding.

However, I'm not really understanding what they offer to small businesses that Amazon Marketplace doesn't.

This link tries to highlight some of the differences:

Shopify vs. Amazon: An In-Depth Comparison

I am not sure I see that the barrier to competitors to Shopify is very high. I myself worked for a Shopify-like startup back in the mid-1990s so this concept has been kicking around a long time.

Why is Shopify going to be the one to knock Amazon off its perch?

---

Thanks to you and Unit2 and everyone else for explaining Shopify to me. I think I have a better idea now what they are doing and why they have been successful.

dimitrig said:

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oski003 said:

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WalterSobchak said:

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I can see the argument that Shopify will displace the stand-alone payment gateways. Maybe they already have. The confluence of technical and legal issues in ecommerce has always made full redirect an appealing option. With better style matching capabilities that appeal only increases. They must be banking on companies feeling full redirects are ok with customers and it's just easier and cheaper to outsource ecommerce and internally staff management of those stores with low-tech employees rather than employing a team of devs to maintain their own store / payment gateway. Shopify charges a nominal subscription fee for all of that on top of transaction fees, so it's probably pretty appealing to some.

But Amazon is a different beast it seems. With Amazon you're leveraging their brand recognition, traffic, and market share. You have a store "on" Amazon.com. That's relatively obvious, and the appeal for customers and vendors. (I know I always check the product sourcing.) With Shopify it's your website, your brand recognition, your traffic. You're just paying SaaS fees to outsource the coding and compliance difficulties that come with ecommerce and redirect your customers there to enter credit info. In that respect it's like comparing a Wix or Squarespace website to a full-stack JS or even Drupal/Wordpress site. But from a reach perspective comparing Amazon Marketplace storefront product listing impressions to those served by your own Shopify website is like comparing Google ad results to Yahoo or Bing organic results. No question which one is seen by more eyeballs daily. Honestly I can see an argument for having both, at least unless/until Amazon's dominance wanes in general. Maybe the best example of this is Whole Foods being a Shopify customer.

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Less than 50% of e-commerce is done on Amazon and E-bay. Clearly there is a market for other e-commerce platforms.

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Sure, but why Shopify? What is their secret sauce?

Amazon 41%
Walmart 6.6%
eBay 4.2%
Apple 4%
The Home Depot 2.2%
Target 2%
Best Buy 1.8%
Costco 1.6%
Kroger 1.4%
Wayfair 1.3%
Chewy 1%
Etsy 0.9%

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Shopify's "secret sauce" is that they provide a very well thought-out infrastructure that allows anyone to set up their own online store, with little or no programming expertise. For brick&mortar retailers, it's a great way to set up an online sales channel.

Shopify boomed when the Covid shutdowns hit, and retail shops closed. But even before Covid, Shopify was an antidote to higher rents for retail space.

If you've ever set up an online store with WordPress, you'll be delighted with how much easier it is to do everything with Shopify. Great tool, great support, and constant, steady improvement.

Unit2Sucks said:

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Wags - great info, thanks for posting. I love that sentiment analysis.

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Sure, no prob.

Investors will really be examining every little piece of data that comes out going forward.

April CPI out tomorrow.

Consensus is that it edged lower to 8.1% from 8.5% in March.

The core CPI is expected to fall to 6.0% from 6.5%

This is an analog that I believe could apply to our current market.
The S&P fell 13% in 2015 over 9 months.

DiabloWags said:

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This is an analog that I believe could apply to our current market.
The S&P fell 13% in 2015 over 9 months.

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I think we are going to hit a bear market in S&P 500 fairly soon like we have already for Nasdaq. I would not be surprised if the S&P 500 fell another 10-20% from these levels. Nothing positive right now, everything that even sniffs at a slow-down that still has high EBITDA or sales multiples (God help those who are high growth who were previously rewarded for distant future earnings) are going to be severely punished and even companies that beat will still get hurt. There are too many headwinds right now for too many industries. With these inflationary pressures, I just don't see a soft landing possible, but I hope to be proven wrong. People have to live through one inflation to learn from history and learn to take it seriously. This is my second one, and it's a tough problem to solve, because politicians are going to look for a quick fix like tax cuts or free money that will stimulate demand and exacerbate inflation when we are already at maximum pressure on supply. We just have to take the bitter pill instead of extending the pain.

calbear93 said:

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I think we are going to hit a bear market in S&P 500 fairly soon like we have already for Nasdaq. I would not be surprised if the S&P 500 fell another 10-20% from these levels. Nothing positive right now, everything that even sniffs at a slow-down that still has high EBITDA or sales multiples (God help those who are high growth who were previously rewarded for distant future earnings) are going to be severely punished and even companies that beat will still get hurt. There are too many headwinds right now for too many industries.

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I will respectfully disagree with another 10 - 20% lower in the S&P.

Reason being, is that the market is a discounting machine and what is obvious is obviously wrong.
We already know about Ukraine, the lockdown in China, EU growth slowing, high gas prices, etc.
The pessimism is so thick right now you can cut it with a knife.
I know of no one who is positioned for a rally.

The "key" going forward will be the FED.
Just like it always has been.
It's about liquidity,

A bottom wont be made until we see a stock rally on bad numbers.
We clearly arent there yet.

I'm curious.
What companies in the S&P can you point to that you believe still sport "high" price to sales multiples?

DiabloWags said:

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calbear93 said:

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I think we are going to hit a bear market in S&P 500 fairly soon like we have already for Nasdaq. I would not be surprised if the S&P 500 fell another 10-20% from these levels. Nothing positive right now, everything that even sniffs at a slow-down that still has high EBITDA or sales multiples (God help those who are high growth who were previously rewarded for distant future earnings) are going to be severely punished and even companies that beat will still get hurt. There are too many headwinds right now for too many industries.

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I will respectfully disagree with another 10 - 20% lower in the S&P.

Reason being, is that the market is a discounting machine and what is obvious is obviously wrong.
We already know about Ukraine, the lockdown in China, EU growth slowing, high gas prices, etc.
The pessimism is so thick right now you can cut it with a knife.
I know of no one who is positioned for a rally.

The "key" going forward will be the FED.
Just like it always has been.
It's about liquidity,

A bottom wont be made until we see a stock rally on bad numbers.
We clearly arent there yet.

I'm curious.
What companies in the S&P can you point to that you believe still sport "high" price to sales multiples?

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It is really hard to answer that because it depends on the sectors and peer group. For example, heavy machinery may be too expensive if EV to sales is greater than one. Low margins, low growth, cyclical, etc. Software may justify 15 or 16 with high incremental for each additional revenue with high margin, high growth, high recurring revenue. Healthcare and diagnostic may be around 5-6. This is the same kind of analysis (although EV to EBITDA is the most population valuation for acquisitions) that companies and PE obviously do when comparing assets or when getting fairness opinions from their financial advisors - they compare to recent multiples in the industry paid for similar assets.

However, a lot of that also depends not only on macroeconomic conditions ( when there is more fear (as opposed to FOMO that prevailed last year), multiples will be lower especially for high growth companies whose valuation relies of future projected high growth because buyers will want discount to compensate for the risk and fear and because future earnings will be worth a lot less in high interest rate era), but also on quality of management. Some will be granted higher multiples based on how well they execute. For example, compare Roper to other industrial compounders. They get a relatively higher multiple to other compounders because of their ability to execute on M&A and their focus on industrial software.

But I hope you are right. I would do much better financially if you were right. The sentiment is just so negative right now that portfolio managers I know are looking to sell a lot that is not top quality and derisk and, as such, in such high risk environment where recession is looking more likely than not on a global basis, not seeing a lot of reason for price support. Hedge funds are more willing to take a risk or arbitrage short term movements.

But, I don't time the market so I don't pretend to know with any certainty what the market would do. Just don't feel like there is reason for a rally or turn in outlook or sentiment until at least two of the following risks, Ukraine, China Zero-Covid policy, inflation, interest rate, etc., are resolved. And even though even companies like Shopify is still high on EBITDA multiple and there is some risk to expanding to fulfillment, I believe in their business model and management and would invest at these levels to hold for the next 10 years. But that is as much risk I would take and I wouldn't invest 8 or 7 figures on such a bet now when I am retired. Something much smaller. And it would be a long bet and not tracking prices every day.

calbear93 said:

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It is really hard to answer that because it depends on the sectors and peer group. For example, heavy machinery may be too expensive if EV to sales is greater than one. Low margins, low growth, cyclical, etc. Software may justify 15 or 16 with high incremental for each additional revenue with high margin, high growth, high recurring revenue. Healthcare and diagnostic may be around 5-6. This is the same kind of analysis (although EV to EBITDA is the most population valuation for acquisitions) that companies and PE obviously do when comparing assets or when getting fairness opinions from their financial advisors - they compare to recent multiples in the industry paid for similar assets.

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The reason I ask is because the entire medical diagnostics sector is trading at low single digit multiples.
It's as though there is no more need to diagnose cancer.
Cancer has been cured.
Who knew?

I'm talking about companies that have excellent management team's that have proven track records of executing at a high level, repeatedly beating numbers and raising FY guidance with high margins, facing massive total addressable markets and growing at 25 - 30% even during Covid when access to physician offices was limited.

I'm talking 3.5 to 4.5x this year's sales in markets where they have a distinct DX tech advantage.
Still burning cash and not yet cash flow positive, but with strong balance sheets and no need to dilute.

Not biotech.
DX.

When the economy slows, I still believe that money is going to rotate into growth.
Never mind the whole new frontier of liquid biopsy.

DiabloWags said:

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calbear93 said:

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It is really hard to answer that because it depends on the sectors and peer group. For example, heavy machinery may be too expensive if EV to sales is greater than one. Low margins, low growth, cyclical, etc. Software may justify 15 or 16 with high incremental for each additional revenue with high margin, high growth, high recurring revenue. Healthcare and diagnostic may be around 5-6. This is the same kind of analysis (although EV to EBITDA is the most population valuation for acquisitions) that companies and PE obviously do when comparing assets or when getting fairness opinions from their financial advisors - they compare to recent multiples in the industry paid for similar assets.

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The reason I ask is because the entire medical diagnostics sector is trading at low single digit multiples.
It's as though there is no more need to diagnose cancer.
Cancer has been cured.
Who knew?

I'm talking about companies that have excellent management team's that have proven track records of executing at a high level, repeatedly beating numbers and raising FY guidance with high margins, facing massive total addressable markets and growing at 25 - 30% even during Covid when access to physician offices was limited.

I'm talking 3.5 to 4.5x this year's sales in markets where they have a distinct DX tech advantage.
Still burning cash and not yet cash flow positive, but with strong balance sheets and no need to dilute.

Not biotech.
DX.

When the economy slows, I still believe that money is going to rotate into growth.

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I heard a lot of buzz about a medical diagnostics company called Theranos.

dimitrig said:

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I heard a lot of buzz about a medical diagnostics company called Theranos.

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Really?

You mean the Company that failed FDA validation and approval for its blood collection containers?

You mean the Company that never had any peer-reviewed research published in medical literature?

Yes, there are lot's of gullible and very dumb people out there.

Ever hear of the New England Journal of Medicine?

That's usually where REAL medical dx companies get their research published in.

Ever hear of the annual American Society of Clinical Oncology (ASCO) conference every June?

That's usually where medical dx and oncology companies publish their clinical trials.

DiabloWags said:

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calbear93 said:

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It is really hard to answer that because it depends on the sectors and peer group. For example, heavy machinery may be too expensive if EV to sales is greater than one. Low margins, low growth, cyclical, etc. Software may justify 15 or 16 with high incremental for each additional revenue with high margin, high growth, high recurring revenue. Healthcare and diagnostic may be around 5-6. This is the same kind of analysis (although EV to EBITDA is the most population valuation for acquisitions) that companies and PE obviously do when comparing assets or when getting fairness opinions from their financial advisors - they compare to recent multiples in the industry paid for similar assets.

---

The reason I ask is because the entire medical diagnostics sector is trading at low single digit multiples.
It's as though there is no more need to diagnose cancer.
Cancer has been cured.
Who knew?

I'm talking about companies that have excellent management team's that have proven track records of executing at a high level, repeatedly beating numbers and raising FY guidance with high margins, facing massive total addressable markets and growing at 25 - 30% even during Covid when access to physician offices was limited.

I'm talking 3.5 to 4.5x this year's sales in markets where they have a distinct DX tech advantage.
Still burning cash and not yet cash flow positive, but with strong balance sheets and no need to dilute.

Not biotech.
DX.

When the economy slows, I still believe that money is going to rotate into growth.

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That's interesting.

I think large cap diagnostic companies like Abbott and Siemens traded at these levels last year as well. Looking at even Wall Street darlings like DHR (the only one I own and follow), Thermo Fisher are trading at mid single digit multiples to sales.

For companies like DHR, I think covid taking up so much hospital spaces, lower budget by laboratories and hospitals, and shut down or china-for-china policies hurt a bit but they still outperformed, but even their stock has been hit despite their high growth, high earnings, and high free cash flow.

Don't now much about cancer diagnostic devises, but I know DHR's immunoassay, chemistry, hematology and molecular devices screen for different types of cancer. Maybe the companies you are referencing are more cellular and genomics, but I know that there is a high cost because of FDA regulation for medical devices and clinical trials required for new or amended products, so maybe this represents derisking by funds of non-profitable companies that will need a lot of capital investments for future products. Not as familiar with medical device so completely guessing here.

calbear93 said:

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That's interesting.

I think large cap diagnostic companies like Abbott and Siemens traded at these levels last year as well. Looking at even Wall Street darlings like DHR (the only one I own and follow), Thermo Fisher are trading at mid single digit multiples to sales.

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Yeah, I'm not talking about labs large cap Labs like Abbott, Quest, Thermo, Lab Corp., or Danaher.

Im talking about Specialty Labs.