High Valuation Blues

My Covestor portfolio is down about 5% in the past month. More proof that I am a terrible public market investor.

And despite that pathetic performance, my portfolio is one of the top followed portfolios on Covestor with 45 followers.

My portfolio is currently filled with energy and precious metal bets, reflecting my serious concerns over the dollar, our oil dependency, and asset inflation. I’ve been asked why it doesn’t include web/technology investments since that’s what I spend my time thinking about and investing in.

Well I’d like to put some money into Google or Amazon, two companies who seem to be doing most things right and are helping to build the web of the future. But Google trades at >50x earnings and Amazon trades at about 140x earnings. There’s not room for much error at those valuations.

I did add Google to my portfolio this morning which will bring some much needed tech to my collection of losing bets on oil and precious metals. I feel that Google is one of the best values in web/tech among all the public market stocks I looked at this morning. I think Google might do close to $10bn in EBITDA next year (calendar year 2008) and if so, it is trading at about 20x forward EBITDA. I tried to find another web/tech stock with that kind of valuation multiple and could not. If you know of a similar value out there, I am all ears.