The Most Obvious Buys in This Market Right Now
Summary
Couch Investor challenges the prevailing market sentiment that all stocks are expensive and overvalued, particularly in the context of certain names showing significant year-to-date gains while others lag. He contends that many excellent businesses are currently undervalued or trading at reasonable prices, presenting "obvious opportunities" for long-term investors. He dismisses calls for a market crash or recession as overly pessimistic, likening such predictions to "Michael Burries of the world" who, in his opinion, were lucky once. The author emphasizes focusing on business fundamentals, growth rates, margins, and ratios rather than short-term news.
His top "obvious buy" picks include:
Mentioned Stocks
Reasoning: Couch Investor considers Amazon an "extremely obvious" buy if the stock continues to drop, specifically mentioning price points around $200, $210, or $220. He believes Amazon will disrupt itself and become more profitable, not getting disrupted by others. Forecasts include over a trillion dollars in revenue by fiscal 2028 with 14% year-over-year growth. AWS is highlighted as a strong growth driver, accelerating to 28% year-over-year growth with margins around 38%. The overall operating margin is 11.5%. He states it's "not expensive" and is one of those companies you "just buy and you forget and you'll be very happy when you retire."
Reasoning: Couch Investor believes Meta is a "no-brainer" buy, similar to Google's performance last year. He notes its current PE of 20.6x (forward is cited as 116.4x but the context implies a lower forward PE than the 5-year median), very profitable, and with good revenue and EPS growth despite negative headlines about token burn and acquisition issues. Operating margin is 41.2%, significantly higher than 23.6% during the 2022 crash. He emphasizes that the stock is "very cheap" and "definitely not that expensive," especially compared to its 5-year median forward PE and EV/EBITDA. He explicitly states, "I have been buying more and more of Meta over the past couple of weeks and actually over the past month or so." He anticipates the stock could double within 12 months.
Reasoning: Couch Investor argues that Nvidia, despite being a $5 trillion company, is not expensive. It trades at a PE of 31x (forward PE around 24x) and is expected to grow remarkably: 80% this fiscal year, 40% next fiscal year, and 21.5% in fiscal 29. Margins are continually improving. He believes Nvidia is well-positioned to win in the AI landscape. While he owns a few shares, he says "if I had a lot of cash, I wouldn't mind opening up a position in Nvidia at 200 and lower" and would have "probably bought at 175." He identifies $185 per share as an "excellent excellent area to add" and sees a "great opportunity" under $200 per share if it drops further.
Reasoning: Couch Investor considers MercadoLibre an "obvious buy" and is actively "adding more and more" to his retirement account. He highlights its consistent revenue growth above 30% for 29 consecutive quarters and believes it can become the first trillion-dollar Latin American company. Despite trading at a premium, he argues it's not expensive for the quality of the business, which benefits from a strong ecosystem, proprietary logistics, and growth in its operating geography. He states, "I would love it if if the stock goes to $1,000. I'll probably sell a lot of shares and maybe raise some cash somehow to buy an insane amount of shares of Mellie at $1,000."