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QQQ is more or less tech stocks so if someone insisted on buying tech, that's what I'd point them to.

Myself, I work in tech, so I generally avoid investing in tech stocks. I already have enough exposure through my work. Same logic applies to people working in oil & gas: if you depend on a sector for your livelihood, the last thing you want to do is invest in those equities and increase your exposure even more.

In a downturn, you'd lose your job and see your investments crash at the same time. I've already seen it happen to friends who work in software/tech, and now I'm seeing it happen to friends in the energy sector too.
 

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What a surprise. Shopify selling 1,850,000 shares. Likely $1.85 billion Cdn, plus up to 15% more in oversuscriptions. The story continues. With a high share price, you can carry on operating at negative margins indefinitely. They should issue as many shares as possible. Kind of like cannabis companies in 2017-18. You have to fill that valuation. This will also make their P/B ratio of 26 to 1 much better.
 

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James.....are you old enough to have lived through Nortel and RIM? I suspect the different generations will have wildly different views on SHOP until proven otherwise ... Can’t imagine the wealth that was lost. As a youngster, I thought I was smart paying $5 a share (on the way down) for Nortel......lost $1500 and didn’t know better to claim the capital loss. Ah youth!
... Yes I'm old enough. I started investing around 2000 and was studying engineering at the time. Some friends of mine had internships at Nortel and people talked about the stock a lot. Some had bought NT shares, but I didn't ...
I don't have to imagine what was lost ... I've had people tell me that their Nortel stock hit $1 million but they were busy with their life so the next time they looked, it had been destroyed. Friends of the family said that if his brother had sold or said to sell, they would have told their $600K stake.

I'm on the other end ... I didn't have the money and was leery of values so I only had about three shares of BCE pre-Norteal spin off. It was bought to practice buying/selling online.

I was going to buy in at $0.77 but a co-worker said Nortel employees on his beer league hockey team didn't recommend it. I waited awhile then bought at $3. When it hit $12, I sold 2/3 and when it started crashing I sold the rest for $8. It was money I could comfortably lose so it wouldn't have been a big deal if it went the other way.


... I don’t recall wifi (outside of the house) even being discussed 10 years ago.
Might be who you hang out with and possibly your job that limited the discussion. I can recall paying for wifi in Starbucks to fix problems on office servers in 2003. Similar at a Second Cup in Mississauga in 2005. Fortunately, work picked up the wifi tab.

The move to free wifi was great.

Keep in mind that the 802.11 standard was setup in '97. A fair amount was taken from the AlohaNet that connected the Hawaiian Islands with a UHF wireless packet network in the '70's.


... I got caught up in the tech bubble in the late 90s as an entry level bank teller. we placed trades by phoning in....did web trading exist? can’t remember ...
Yes ... TD Waterhouse offered it in '96. Phone orders were something like $45 while the online was something like $15. The tech crash plus the requirement to have a live person review each online trade meant I phoned in couple of orders, explained I would have preferred to do it online but couldn't risk the delay and was billed the cheaper online rate.


Cheers
 

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I think the stock is a bubble (overpriced), caught up in a hype.

SHOP market cap: $126 billion
RY market cap: $118 billion

I ordered from a retailer yesterday that was using the Shopify platform. Yes, it looks like a solid platform and creates a professional experience. There are competitors, but Shopify sounds like the easiest, most popular one today. Another one that's also pretty easy to use is Square (SQ).

That reminded me of the excitement I saw first hand during the rise of Square when I lived on the US west coast. Many small vendors started adopting Square, and people wouldn't shut up about it. I think that kind of environment leads to an amateur-driven hype, pushing the stock up. You can clearly see the hype in the SQ stock chart, attached.

Here's what I think is happening:
  • it's a hype and fad, just like SQ was (briefly)
  • Shopify is exploiting the hype with share issuance + huge compensation
  • rally has a limited lifetime, but got a huge surprise boost with COVID
  • it's impossible to short sell stocks like this
What contributes to the price distortion is the short selling problem. One might ask, why wouldn't institutions be short selling this? The SQ chart shows why. Something may be a stupid fad, but what happens if you short it at $30 while it continues going to $100 ?

Instead, joining the momentum rally is usually the more profitable trade. And since SHOP has a good story behind it that resonates with non-professionals, it's easy to justify going long.

Shorting this is suicide. Therefore, we don't get "price discovery" and normalization.

20170
 

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Here's another reason SHOP is rallying like mad. Momentum and technical traders look everywhere in the market to find hot stocks showing good trends.

With the stock weakness in 2018 and now 2020, there are extremely few stocks that are still showing solid, uninterrupted momentum. In other words, it's extremely difficult to find a momentum rally to join, and it became even harder after this recent crash.

SHOP is one of the only games in the market and it's listed in the US (sadly). Therefore, momentum traders from around the world have piled into SHOP. Many of them probably know it's a bubble... it's somewhat of a ponzi scheme now. The goal is to ride the trend and get out, not buy & hold long term.
 

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I had not realized until yesterday that the recovery of XIU was driven almost entirely by SHOP and the Gold companies in the index. Excluding just those few companies is a lot less pretty picture, especially compared to the much broader US markets recover.
The reported Canadian market recovery news for the past month is somewhat misleading.
 

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I had not realized until yesterday that the recovery of XIU was driven almost entirely by SHOP and the Gold companies in the index. Excluding just those few companies is a lot less pretty picture, especially compared to the much broader US markets recover.
The reported Canadian market recovery news for the past month is somewhat misleading.
I wouldn't say entirely, but it's true that XIU is getting a nice boost from gold and tech. The whole point of indexing is that you don't really know which companies might drive returns in the future, so you hold all of them cap-weighted, and let whichever is successful (the larger market caps) drive the returns.

In the US, index returns for many years now have been driven by tech. If you go back in time to 2005, nobody wanted to invest in tech. After the tech crash, the sector was hated... but it has turned out to drive most of the S&P 500 returns. Today, the US is all about tech stocks:
MSFT is 5.7% of S&P 500
AAPL is 5.1%
AMZN is 4.3%

It's the beautiful thing about indexing. It's adaptive; whichever companies turn out to be strongest are the ones which drive your returns.

If in the future, energy comes back strongly and drives most of the TSX returns, then an investor in XIU will do better than someone who tried hand-picking stocks, and excluded energy.

Or if we enter a high inflation / currency devaluation period, commodities could do great. Miners and materials could be the main drives of the TSX. But again, the stock pickers (including me) always exclude commodity stocks, so we would miss out.

These days, it's very popular to exclude energy and commodities. And just about nobody in Canada owns Canadian tech, even though it's been the strongest sector for a decade now. These are potentially huge mistakes of stock-picking, but XIU doesn't suffer from that.
 

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Even though the share price has been doing extremely well YTD im still bullish on SHOP. Even though it wont affect the fundamentals I'd like to see a stock split soon
 

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I think we may be talking about this "bubble" for yet another few years, so if the bubble is really going to pop, we don't know when because it's been 5 years that we've been talking about that bubble and yet here we are, still moving up. I'd use Shopify for short-term investments with small positions and leave a few shares on the long run. I personally own SHOP only indirectly as part of my small position on XIT. I've made as much money this year on KXS that I would've done on SHOP.

SHOP's last years return
2016 : +75%
2017 : +120%
2018 : +35%
2019 : +180%
YTD : +100%

I agree that it does not seem sustainable based on the balance sheet and a few valuation measures. That being said, I think SHOP may be a good investment, but I won't buy it at this price, so I'm skipping my turn. I agree that SHOP is currently playing with its hype.

I don't know much about stocks maintaining a hyper-growth during a few years, the only one that comes up to my mind is KL which did +1775% from 2016 to 2020, that's more than +100% annual growth for 4 years, but let's not compare gold and tech. Let's just say that KL maintained this with a current P/E of 17 and P/S of 8, while SHOP's P/E is negative and P/S is 75... (based on Yahoo).

Please note that I'm an inexperienced trader and I wish I had started a decade ago, therefore my opinion and comments may not be the most worthy.
 

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I think we may be talking about this "bubble" for yet another few years, so if the bubble is really going to pop, we don't know when because it's been 5 years that we've been talking about that bubble and yet here we are, still moving up.
The tricky thing with bubbles is that (a) you never know how long they could last and (b) it could turn out to not be a bubble, and actually supported by fundamentals.

I don't see any problem with XIT as a diversified bet on the Canadian tech sector. This sector is under-represented in the broad indexes.

I'm not entirely convinced it's all a bubble.
 

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SHOP market cap: $166 billion
RY market cap: $131 billion

This is really crazy stuff. SHOP went from being a hair larger than RBC to 27% larger.

I really think that the Federal Reserve has fuelled an insanity in stocks. They printed tons of money, and I think this sparked "irrational exuberance" in the stock market; especially tech stocks. SHOP appears to be one of the beneficiaries.
 

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Shopify Stock (TSE: SHOP) is pretty impressive. The stock price just keep growing and growing. Right now in July 2020, the stock price is much more than double what it used to be in 2019. It is an impressing stock, such as Apple stock, that just keeps growing and growing.

 

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I'd still be cautious with SHOP unless you want some quick profits over the short term before something bad happens.

SHOP is now at 60 P/S (or even 95 ttm P/S). Last year, it was at 30. Previous years, it was around 10-15 P/S. Until the end of 2018, that 10-15 P/S was healthy, but now its valuation is way over its sales.

FAANG stocks were always below that 15 P/S range in the last 5 years.
Our TSX top tech stocks were always below 20 P/S over the last 5 years (CSU, DSG, KXS).

SHOP's revenue went from 400M in 2016 to 1600M in 2019, which is x4. Meanwhile, its price did about x10.
2020's sales better keep up on investor's excitement...

Personally, I hold SHOP only through XIT at the moment.

I'm pretty sure SHOP will drop 20-30% in the near future. I'm glad SHOP slowed in the last 2 months, because XIT's distribution algorithm got up to almost 40% on SHOP by the end of April. That's way too much of a single stock in an ETF.
 
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