I have nearly all of my individual stocks in large-cap dividend companies with 'low' PE ratios: 10 to 25.
But I'm only 31 and have a long investment career ahead of me. So the devil on one shoulder wants me to be bold, and re-balance into 5-10% into these high-flyer tech companies with marginal profits and a ton of growth already priced in.
However, I just can't seem to convince myself that my money is worth it. Sure, NFLX, AMZN, FB, TSLA are pioneers. But according to their profit/loss sheets, their future potential is already priced in. At some point, won't the value of a company need to be reflected in the share price?
Ben Graham says to be wary of these types of stocks because it is very rare to buy a stock at a XXX PE level, then expect to make money as it descends to a 20x-ish PE level. I am trying to find historical examples of companies that have successfully done this, but am stumped. Thoughts/examples?
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