To The Moon

The answer may shock you.

One of the best quotes about valuation I’ve ever seen came from Sun Microsystems’ CEO after the dot-com crash.

At 10x revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. Zero costs. Zero R&D. Zero taxes. Zero employees.

What were you thinking?

Sun Microsystems CEO Scott McNealy

How much of the $S&P 500(.SPX)$ is trading for this crazy valuation today?

The answer may shock you. I’ll get to that in a moment.

Stock Valuations

This post from Thierry was what had me digging into valuations today. It’s true that we’ve normalized 10x price-to-sales multiples, but as long-term investors, we shouldn’t because it’s extremely difficult to live up to that valuation.

He went on to post these stats. This is what the dot-com crash looked like.

• $Cisco(CSCO)$ : ~25x sales, P/E above 200. Crashed -90%. Finally broke its 2000 peak in December 2025. 25 years and 8 months later.

• $Intel(INTC)$ : ~13x sales. Crashed -82%. Finally broke its 2000 peak in May 2026. Almost exactly 26 years later.

• $Microsoft(MSFT)$ : ~25x sales. Crashed -65%. Took 16 years and 8 months to make a new high (October 2016).

• $Qualcomm(QCOM)$ : ~30x sales. Crashed -88%. Took roughly 20 years to break even.

• Sun Microsystems: ~10x sales. Crashed -97%. Acquired by Oracle in 2009.

• JDSU: ~50x sales. Crashed -99%. Broken into pieces.

• Yahoo: ~50x sales. Crashed -97%. Sold to Verizon for a fraction.

• Lucent: ~10x sales. Crashed -99%. Eventually absorbed by Nokia.

• Nortel: ~15x sales. Bankrupt in 2009.

These weren’t some $&#t-cos, these were the key infrastructure behind the dot-com buildout. Some of the equipment they made is still in use today!

Now, look at the companies trading over a 10x price-to-sales multiple today. Recognize any of them?

$NVIDIA(NVDA)$ $Apple(AAPL)$ $Alphabet(GOOGL)$ $Broadcom(AVGO)$ $Tesla Motors(TSLA)$ $Micron Technology(MU)$ $Eli Lilly(LLY)$ $Advanced Micro Devices(AMD)$ $Oracle(ORCL)$ $Visa(V)$ $MasterCard(MA)$ $Lam Research(LRCX)$ $ARM Holdings(ARM)$ $Applied Materials(AMAT)$ $Palantir Technologies Inc.(PLTR)$ $KLA-Tencor(KLAC)$

7 companies with a valuation over $1 trillion are over 10x P/S, and that doesn’t include SpaceX, which will IPO as early as this week.

Keep going down the list, and more stocks in memory, brokerages, and software are trading at crazy valuations.

So, why hasn’t the Asymmetric Portfolio kept up with these hot stocks this year?

I’m not riding this explosion in valuations. While over 50% of the S&P 500 has a P/S multiple over 10x, only 2 of 24 stocks in the Asymmetric Portfolio (Alphabet and Joby) trade for that multiple.

16 of 24 stocks trade for a P/S multiple under 5x. And in aggregate, the stocks I own are growing faster than the S&P 500.

I want multiple expansion to be a tailwind, not a headwind.

Long-term, I think that will be the right strategy, but it’s why I’m underperforming the market since October 2025.

We’ll see if I’m right or not. 10x sales is a high bar to beat, even for the best infrastructure stocks of the day.

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