[james4beach]

Maybe we can build a list of the craziest, most hyped, bubble stocks (or other securities) in this current market rally? Here's what I have

PLUG
TSLA
NIO
FCEL
ARKK
Bitcoin
Ethereum

And here are some performance statistics, sorted by 12 month return. Originally I was going to use % but the numbers are so huge that I decided to convert them to "multiples". For example NIO went up 17.7 fold, over 12 months ($1,000 became $17,700). The lowest performer on the list is ARKK which only about tripled in price, 2.8 times.

The winner over 1 month is PLUG.

I am not interested in owning any of these, but bubbles are fascinating to watch.

 

[doctrine]

I have some special cases for you.

COVID test companies like SONA Nanotech on the CSNX, MedMira and THRM on the TSXV.

CloudMD (DOC) on the TSXV

VERY good butchers on the CNSX.

Converge Technology on the TSXV.

 

[MrBlackhill]

We should define what's the criteria for a stock to be considered on a bubble.

I guess your criteria is just insane share price growth, no matter if it seems justified or not based on usual metrics.

For instance, is it a bubble when a stock rises +400% but is still trading at P/S below 1?

Is it a bubble when a stock rises +800% but is still trading at P/E below 10?

 

[james4beach]

I wouldn't worry about valuation... just list anything that's been going up like crazy recently.

Interesting ideas @doctrine

Personally I love the parabolic chart on PLUG. By "love" I mean, I'm fascinated by this insanity. And look at that volume! Plus... this is no penny stock. It's worth $30 billion! So crazy.

Volume today was 110 million shares. That's double the SPY volume! Absolutely unbelievable.

 

[james4beach]

Maybe I should clarify that I am not endorsing any of these, and I would never buy any of these, except for my $600 in bitcoin (gambling fun).

But Bitcoin is boring compared to these stocks. Take FCEL for example. It isn't a penny stock, not a micro cap. It's a large stock with very high daily volume and liquidity.

Here are the single day movements recently, rounding to whole percents. Each of these is one day!

Jan 5: up 6%
Jan 6: up 10%
Jan 7: up 22%
Jan 8: up 2%

Jan 11: up 3%
Jan 12: up 21%

 

[james4beach]

I was just watching misc clips on Youtube and this came into my recommendations. Here you'll find Cramer pumping 3 of the stocks I listed!

I can't believe people invest like this.

 

[james4beach]

Here's a mid cap Canadian one! Same mania theme as many of the ones I listed above, and what Cramer is pumping.

Ballard Power, BLDP. It's up 74% over the last month, and up 279% in the last year (that's nearly 4X)

 

[MrBlackhill]

The best one on the Canadian side might be Acuity Ads (AT.TO).

52-week low : $0.72
52-week high : $22.44
That's 31x.

Its trailing 1-year is currently 11x.

Calgary_Girl has enjoyed that stock.

It was recommended on Motley Fool Hidden Gems when its price was $1.14 a few months ago. It's currently trading at $17.61.

 

[MarcoE]

How do we define if they're in a bubble? If they never pop, and they become the next Amazons/Netflixs/Googles, then maybe they're not bubbles. Maybe we can only safely call them "bubbles" after they pop?

 

[MrMatt]

Ethereum is not a security.

How do we define if they're in a bubble? If they never pop, and they become the next Amazons/Netflixs/Googles, then maybe they're not bubbles. Maybe we can only safely call them "bubbles" after they pop?

<sarcasm>If they're full of nothing but air, they're a bubble. If they stay that way for a while, maybe they're a mylar balloon.

Really we're talking about stocks that have prices that are far beyond what they are worth.

I held off years before buying Google and Amazon, because I didn't understand the valuation. Maybe that's the case here.

 

[Jimmy]

Most of these stocks growing rapidly have the sales and earnings to support their valuations. The market determines the value of these companies after all and is reasonably efficient as in all news is impounded into the stock price. On Morningstar the tech sector is ~ 15% overvalued now, the market 10% . Not exactly a 'bubble'

The returns are from the absolute bottom of the market too where many companies were doubling over the past 6 months - even stodgy oil companies so seeing a tech stock rise 200% shouldn't be too alarming. The trend of online shopping and other e services just got accelerated too in the pandemic.

You can look up the P/S ratio and compare it to the sales growth. Then you can see if any companies are under or over valued and invest accordingly.

 

[m3s]

I held off years before buying Google and Amazon, because I didn't understand the valuation.

Me too. Same for Apple, Tesla etc. They always intrigue me then I read on here how overvalued they are

Exponential growth is hard to understand until it's hindsight

 

[MrMatt]

Me too. Same for Apple, Tesla etc. They always intrigue me then I read on here how overvalued they are

Exponential growth is hard to understand until it's hindsight

I think Apple is a bit overvalued, but they're moving a lot of their revenue from devices sales to the App Store.

 

[james4beach]

Most of these stocks growing rapidly have the sales and earnings to support their valuations. The market determines the value of these companies after all and is reasonably efficient as in all news is impounded into the stock price. On Morningstar the tech sector is ~ 15% overvalued now, the market 10% . Not exactly a 'bubble'

You should buy them, Jimmy. As you've said before, why settle for index returns when with a bit of smarts and hard work, you can beat the index.

TSLA, NIO, FCEL, PLUG

 

[MrBlackhill]

You should buy them, Jimmy. As you've said before, why settle for index returns when with a bit of smarts and hard work, you can beat the index.

TSLA, NIO, FCEL, PLUG

@Jimmy only said the tech was a bit overvalued by ~15%, which should not qualify as a bubble.

Same thing as why do you @james4beach buy the overvalued US and Canadian stocks when they are some of the most expensive markets based on their CAPE ratios? Why don't you buy Russian stocks instead?

 

[james4beach]

Same thing as why do you @james4beach buy the overvalued US and Canadian stocks when they are some of the most expensive markets based on their CAPE ratios? Why don't you buy Russian stocks instead?

One buys diversified indexes (or in a broadly diversified portfolio of stocks) to benefit from the equity premium and the market's tendency to rise over time due to the aggregate corporate earnings growth. That's investment.

One buys hot/mania stocks like PLUG to gamble and hope they will go up dramatically in the short term. It's an entirely different game. Looking at the price and volume action it's clear that PLUG and NIO are in a momentum/pumping kind of mania.

I think it's important to not confuse the two. Some people are aware that they're just gambling on PLUG, NIO, Bitcoin.

Some other people may mistake this for "investing".

 

[Jimmy]

You should buy them, Jimmy. As you've said before, why settle for index returns when with a bit of smarts and hard work, you can beat the index.

TSLA, NIO, FCEL, PLUG

Maybe you should try and understand these stocks and how to value them first instead of just dismissing or mislabeling them. Buying indexes is less work though.

 

[MrBlackhill]

Well, I was wondering why you sarcastically answered to go and buy such hot stocks when he just said the tech sector is 15% overvalued, therefore not a big bubble.

There are stocks soaring into a bubble. There are stocks soaring justified by the growth of their financials. There are stocks soaring due to their disruptive innovation potential. And there are stocks soaring because they are undervalued.

Not every stock soaring is a bubble.

 

[james4beach]

Maybe you should try and understand these stocks and how to value them first instead of just dismissing or mislabeling them. If you don't want to learn more about investing that is fine too.

Yes, I understand the stocks. There is manic, trend-chasing action on TSLA, NIO, FCEL, PLUG, at the moment.

The companies themselves may or may not be bogus. I'm saying that the current trading (price action) happening on them is very likely a bubble-like speculative mania. That makes it very hard to invest in them, because their prices are very likely distorted by this gambling activity.

 

[Jimmy]

Yes, I understand the stocks. There is manic, trend-chasing action on TSLA, NIO, FCEL, PLUG, at the moment.

The companies themselves may or may not be bogus. I'm saying that the current trading (price action) happening on them is very likely a bubble-like speculative mania. That makes it very hard to invest in them, because their prices are very likely distorted by this gambling activity.

Maybe there is or isn't what you claim. Either way others have taken the time to value and research them, bought at good times and and see them as good investments. Tesla for ex is in many award winning ARK ETFs and the fund manager sees it as a a long term hold.