YOU MAKE YOUR MONEY WHEN YOU BUY, YOU COLLECT WHEN YOU SELL!
Wall Street is a lot like a carnival—bright lights, fast talkers, and plenty of ways to part a fool from his money. Every new generation thinks it has discovered gold in the form of some shiny stock, only to learn later it was nothing more than gilded brass. The secret, as old as commerce itself, is simple: don’t pay a dollar fifty for a dollar bill. Value investing isn’t about chasing the parade—it’s about waiting patiently by the roadside, tipping your hat only when a bargain walks by.
“In the long run, the market is a voting machine only for the impatient and a weighing machine for the wise. The trick isn’t to outshout the crowd, but to outlast it. Buy what is solid, pay less than it’s worth, and let time do the heavy lifting. For in the quiet arithmetic of compounding, the patient man always has the last laugh.”
💬 Warren Buffett Quotes on Value Investing
- “Price is what you pay. Value is what you get.”
- “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
- “Be fearful when others are greedy, and greedy when others are fearful.”
- “The stock market is designed to transfer money from the Active to the Patient.”
Core Principle
- Valuation matters more than hype.
- A great business can still be a poor investment if you pay too high a price.
Are the Magnificent Seven a good Deal right now?
Most People have the what is called the magnificent seven in their portfolio, whether directly or indirectly via SP500. But are they a good deal. Let’s take a “deeper” dive.
Rankings (Worst → Best)
7. Tesla (TSLA)
- Issue: 90%+ revenue still from cars → essentially a car company.
- Hype risk: Investors value it like software/robotics, but sales multiples are wildly higher than Ford, Honda, or VW (13x vs. 0.25–0.3x).
- Valuation: Current ~$340 vs. intrinsic ~$50–363.
- Projected IRR: ~-1% under mid assumptions.
- Takeaway: Overvalued; avoid until a much deeper pullback.
6. Amazon (AMZN)
- Strength: Massive revenue/profit growth, $1T+ revenue expected by 2029.
- Issue: Stock has been flat despite growth (valuation drag).
- Valuation: Current ~$225 vs. intrinsic ~$73–282.
- Projected IRR: ~4% mid case.
- Takeaway: Strong business, but price too high for value investors now.
5. Microsoft (MSFT)
- Strength: $3.7T market cap, $65B free cash flow, strong growth/acquisitions.
- Issue: Current price already prices in future earnings.
- Valuation: Current ~$505 vs. intrinsic ~$240–600.
- Projected IRR: ~5.3% mid case.
- Takeaway: Great company, but little upside unless price dips.
4. Apple (AAPL)
- Strength: $100B free cash flow average, growing subscription margins.
- Issue: Slower revenue growth ahead (already huge scale).
- Valuation: Current ~$236 vs. intrinsic ~$120–277.
- Projected IRR: ~5.8% mid case.
- Takeaway: Still strong, but wait for a correction before buying.
3. Nvidia (NVDA)
- Strength: AI chip leader, $72B free cash flow in latest year.
- Issue: Growth slowing, valuation at extreme levels.
- Valuation: Current $1,200+ vs. intrinsic ~$73–290.
- Projected IRR: ~7.5% mid case (with aggressive assumptions).
- Takeaway: Phenomenal company, but price is unsustainably high. Only interesting on a large pullback.
2. Google (GOOGL)
- Strength: $65B free cash flow, strong margins, global ad dominance.
- Issue: Stock already ran up 20%+ YTD.
- Valuation: Current ~$150–160 vs. intrinsic ~$130–350.
- Projected IRR: ~8.25% mid case.
- Takeaway: More reasonable than peers; a solid buy candidate if it pulls back closer to $130–140.
1. Meta (META)
- Strength: Huge ad revenue base, untapped international monetization (WhatsApp, Instagram, Facebook, 3.5B users).
- Valuation: Current ~$735 vs. intrinsic ~$466–1,137.
- Projected IRR: ~9.2% mid case.
- Takeaway: Best positioned among the 7, still slightly rich at current price, but top of the list to buy on a pullback.
Big Picture
- Even the best-case returns averaged only 3–7% annually for most, meaning these stocks are likely overpriced today.
- On meaningful pullbacks:
- Top Targets: Meta (#1), Google (#2).
- Second Tier: Nvidia (#3), Apple (#4), Microsoft (#5).
- Avoid for now: Amazon (#6), Tesla (#7).
- If no big pullback occurs, a low-cost S&P 500 ETF might offer similar returns with less risk.
📊 Magnificent 7 Buy Price Watchlist
| Rank | Company | Current Price* | Intrinsic Value Range | Mid-Case Value | Target Entry (Margin of Safety) | Notes |
|---|---|---|---|---|---|---|
| 1 | Meta (META) | ~$735 | $466 – $1,137 | $750 | < $600 | Strongest upside; global ad monetization not fully tapped. |
| 2 | Google (GOOGL) | ~$155 | $130 – $350 | $216 | < $150 (ideal $130–140) | Reasonable valuation, high free cash flow. |
| 3 | Nvidia (NVDA) | ~$1,200+ | $73 – $290 | $150 | < $300 | Amazing company, but priced for perfection. Only attractive far lower. |
| 4 | Apple (AAPL) | ~$236 | $120 – $277 | $180 | < $180 | Slower growth, but subscription business helps margins. |
| 5 | Microsoft (MSFT) | ~$505 | $240 – $600 | $375–410 | < $400 | Durable business, limited near-term upside. |
| 6 | Amazon (AMZN) | ~$225 | $73 – $282 | $150 | < $150 | Fantastic business, but price already bakes in growth. |
| 7 | Tesla (TSLA) | ~$340 | $50 – $363 | $144 | < $150 | Overvalued vs. peers; mostly still a car company. |
*Prices are rounded and approximate.
📝 Key Takeaways
- Best Buy Candidates (on pullback) → Meta, Google.
- Second Tier (need a steeper drop) → Microsoft, Apple, Nvidia.
- High Risk / Overhyped → Amazon, Tesla.
- ETF Alternative: If these don’t hit target entry levels, an S&P 500 index fund could deliver similar 5–7% returns without timing risk.
Personally, I don’t hold any of these stocks right now. At the moment, I keep about 50% of my accounts in cash, with the rest in metals—mainly gold and some silver, some minerals, and miners which I plan to hold a bit longer. As they say, I’m keeping some powder dry for the expected correction, at which point I’ll start buying from the list above, little by little.
This isn’t investment advice—if anything, think of it more as an investment warning. Don’t rush to buy anything. Take your time, study each stock, and wait for the right price. If you’re young, you can afford mistakes and even a 15-year wait holding the S&P 500. But the older you get, the more you should focus on protecting capital and limiting risk. At the end of the day, investing is about managing risk. Remember—it’s not how much you make, it’s how much you keep.
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