Roku is trading at 500 P/E. Square at 400 P/E. SPOT isn't profitable, SHOP at 117 P/E, CRSP isn't profitable, U isn't profitable, TWTR is fine, PLTR is a great company but will disappoint growth expectations. It's being valued as an SAAS, which it really isn't.

The upside has been completely priced in. The downside assumed nonexistent. These guys are going to be trading at a fraction of those multiples during the next recession. Cathie's fund dies with outflows. As share prices decline, outflows occur, and the price declines, driving more outflows, causing a dramatic decline in the price of the fund.

That said, I do expect the Jan 22 puts to expire worthless. Timing these things is hard.

P/E is not a good metric to use in evaluating growth stocks.

Historical p/e ratios:
https://www.macrotrends.net/stocks/charts/AMZN/amazon/pe-ratio
https://www.macrotrends.net/stocks/charts/FB/facebook/pe-ratio
https://www.macrotrends.net/stocks/charts/NFLX/netflix/pe-ratio

As long as the story remains and the companies continue to grow, their valuations are justified. SHOP is really starting to look good, tripling its revenue over the past two years, starting to turn a profit, and with incredible guidance, this company can continue to hit 2K with the current trajectory it's on.

All companies, regardless if they're growth or not, are expected to have some trajectory of return and growth. Those that have weak looking balance sheets are going to require higher rates of growth in order to justify their valuation. All the companies I have listed are growing rapidly whose business models will continue to thrive as we progress in the future.

Take a blue chip like MSFT, trading at a p/e of 36 right now. Investors are expecting this company to continue to grow. If its revenue flatlines and stagnates, their stock is going right back to p/e 15-20 where it was trading ten years ago when it didn't have the growth story it has today. That means MSFT would be a $120 -$140 stock if it flatlined. All stocks have some expectation of the future priced in.

This post was edited by ta909 on Jun 23 2021 01:15pm

You are not a Tesla Bag Holder at $700 lol

None.

it's getting close to $700 now as well

You can use that logic to justify any crazy valuation.

At the end of the day, a high P/E is only justified if the growth assumptions are accurate and prolonged. A P/E of 500+ needs a decade or more of 30% profit growth in order to enter the realm of "over-valued". Forecasts are notoriously unreliable, especially over long periods of time. An average growth rate of 15% might be fine for the business, but catastrophic for its share price relative to expectation.

Most companies are not going to be Facebook, and even Amazon (probably the biggest success in the last 20 years) cratered during the 2000 dot com bust. More money has gone into profit-losing businesses than at any point in the last 50 years. There will be a reckoning.