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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Hi. I totally missed the boat on Palantir. When the stock was in the high 20s, my beliefs and lots of what I read was confirming that the stock was over priced (at least that is what I thought), and I felt same as the stock rose to the 30s, 40s, .... and now over a hundred. And I still feel that the stock will need to correct at some time, as it has a trailing P/E in excess of 500 and possibly a P/E of at least 300+ looking forward. I made exactly the same mistake with many other companies such as Netflix, Facebook, .... I know that small, newer companies can exponentially increase their profits as they grow up but there is no guarantee that they will be successful (let alone be excessively successful).
So my question is three fold (please deduct necessary credits).
1. What did I do wrong here? I watched the stock go up and up and never pulled the trigger, thinking it was always too expensive. I sometimes feel it is more of a meme stock.
2. Would you buy Palantir at these prices / why?
3. Do you feel that there may be some other companies out there that may be in their early days (or well established) with lots of room to grow. If yes, your listing a few of your top convictions, along with a sentence (or two) explaining your rationale and intuition would be greatly appreciated.
Thank You.
Read Answer Asked by Walter on February 10, 2025
Q: The Cerebras IPO, that has been delayed since last year, looks very interesting. I wonder if 5i has a view on if/when it will happen and considers it attractive.
Having spent some time working on wafer scale integration, it is a far more complex and challenging problem than they make it sound like.
Appreciate your insight, Peter
Read Answer Asked by Peter on February 10, 2025
Q: Rob's question regarding Constellation not issuing new shares and any other companies, I thought maybe BRK fit that or because of BRK.B guess not.

Also not to nitpick but CSU and GOOG can't be compared in the non issuing equity even though not a direct comparison as you did say "To our knowledge, GOOG has not issued shares other than for acquisitions, which is not quite the same" as GOOGLE has issued insane amounts of shares via SBC and of course they buyback to keep share count BUT Is there not a better way? BEN HUNT says it well I think:

"When stock buybacks are used to sterilize stock-based comp (i.e., a company gives managers stock with one hand and buys it back from them with the other hand), no money is “returned to shareholders”. This is true whether or not management actually sells its shares into the buyback program.
Stock buybacks only “return cash to shareholders” to the degree that the buyback program reduces the share count. To the degree the buyback program does not reduce the share count, but simply sterilizes new issuance to management, it is purely a transfer of wealth from shareholders to management."

Thoughts or rebuttal to that?

For readers on Constellation:
Mark Leonard was funded with 25 million from OMERS in 1995 to start, they had one private placement in 2000 that Leonard regrets for 60 million (TD Capital – Birch Hill and OMERS), then going public in 2006 no shares were issued just provided exit for OMERS/Birch Hill.

The best things about them among never issuing new shares for acquisitions etc is they have no Stock Based Compensation or RSU/ESO and that combo is not replicated anywhere (plus executives and employees having to buy stock with parts of their bonus and hold for 4 years is great alignment).

This along with numerous other factors are why its my highest holding and you never worry about it, ever, 10 years reading your answers and your views have never changed on this company, you have always been a big bull and wish I didn’t wait until 2022 to buy or really understand the company!

Read Answer Asked by Michael on February 10, 2025
Q: Hello, can you please provide your opinion of IXJ and whether you think it is a buy at its current price.

Also, if there is a different US healthcare ETF that you think is better please provide advise why and what you think a good entry price is.

Thanks as always for the advice.
Paula
Read Answer Asked by Paula on February 07, 2025
Q: Peter and His Wonder Team
I have never owned an auto stock. I realize competition is fierce and Telsa has an edge. However Ford is a survivor and is an American icon and so cheap...Please give the pros and cons of owning Ford. Or is the auto industry just too unpredictable to take a risk? Thanks for your assistance which is always valuable.
Read Answer Asked by Ernest on February 07, 2025
Q: Hi 5i
Another question on shopify... Earnings next week....What is expected and do you expect they will meet these earnings expectation?
Are you comfortable holding into earnings.... and would you expect any influence from Afrms positive results today Friday Feb 07

thx
Read Answer Asked by jim on February 07, 2025
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