Looking back now, it seems pretty solid?
When everyone is bullish, it's even more crucial to stay level-headed.
When everyone is bullish, it's even more crucial to stay level-headed.
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清水研市
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Why am I not rushing to jump into the US stock market when everyone is going wild buying?
Why am I not rushing to jump into the US stock market when everyone is going wild buying?
Don't let the fact that I'm diving into crypto in WEB3 fool you; my main gig in WEB2 has always been stocks. After over a decade in the A-shares game and 8 years of dodging black swan events in the crypto space, I've developed a healthy respect for market risk. This respect is what helped me sidestep the massive drops in October last year.
Recently, most folks in the crypto scene are eagerly pivoting to the US stock market. Whenever someone hypes a stock, many people mindlessly chase it. Just the other day, old Huang and Chuanmu were hyping MRVL, claiming it's the next trillion-dollar company. But after doing some digging, I found that MRVL (Marvell) has a ROIC (Return on Invested Capital) of only 6.79%. Historically, Marvell has made several huge premium acquisitions (like the core Inphi asset) to transition into a light connectivity giant. These acquisitions have piled up significant intangible assets and goodwill on the balance sheet, leading to an enormous 'invested capital base' (denominator). In today's high-interest environment, a 6.79% ROIC barely covers its cost of capital (WACC). In contrast, Nvidia's ROIC stands at 99.20%. From this perspective, Marvell is overpriced in the short term. I know the hype is all about future growth, but the market is only willing to chase it despite a static P/E soaring to 94x because of one bet—Marvell's rapid growth in customized AI chips (ASICs) and optical modules (DSPs) is expected to yield profit compound growth rates of over 40%-50% in the next two to three years. This makes its dynamic P/E look terrifyingly high, yet its Forward PEG (Price/Earnings Growth ratio) remains around 1.24x. The problem is, with a trailing P/E of 94 and a cash flow yield just over 1%, any quarter that merely meets expectations without significantly exceeding them will trigger a brutal valuation crash. That's why I didn't jump in; I’m just watching and waiting for a better entry point. This is just a micro-level case—let's talk macro.
Don't let the fact that I'm diving into crypto in WEB3 fool you; my main gig in WEB2 has always been stocks. After over a decade in the A-shares game and 8 years of dodging black swan events in the crypto space, I've developed a healthy respect for market risk. This respect is what helped me sidestep the massive drops in October last year.
Recently, most folks in the crypto scene are eagerly pivoting to the US stock market. Whenever someone hypes a stock, many people mindlessly chase it. Just the other day, old Huang and Chuanmu were hyping MRVL, claiming it's the next trillion-dollar company. But after doing some digging, I found that MRVL (Marvell) has a ROIC (Return on Invested Capital) of only 6.79%. Historically, Marvell has made several huge premium acquisitions (like the core Inphi asset) to transition into a light connectivity giant. These acquisitions have piled up significant intangible assets and goodwill on the balance sheet, leading to an enormous 'invested capital base' (denominator). In today's high-interest environment, a 6.79% ROIC barely covers its cost of capital (WACC). In contrast, Nvidia's ROIC stands at 99.20%. From this perspective, Marvell is overpriced in the short term. I know the hype is all about future growth, but the market is only willing to chase it despite a static P/E soaring to 94x because of one bet—Marvell's rapid growth in customized AI chips (ASICs) and optical modules (DSPs) is expected to yield profit compound growth rates of over 40%-50% in the next two to three years. This makes its dynamic P/E look terrifyingly high, yet its Forward PEG (Price/Earnings Growth ratio) remains around 1.24x. The problem is, with a trailing P/E of 94 and a cash flow yield just over 1%, any quarter that merely meets expectations without significantly exceeding them will trigger a brutal valuation crash. That's why I didn't jump in; I’m just watching and waiting for a better entry point. This is just a micro-level case—let's talk macro.
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