There was a day, maybe Monday? Maybe even last Friday where those techy-er than tech stocks were having a bad day, the NASDAQ Index was down around 10% from it’s November high. Suffice to say, whatever ailed that group of stocks soon disappeared and tech names were suddenly back-to-the-races. So I began to think, (which doesn’t happen very often), but when it does it can be sort of frightening – was this little bitty correction just a “dress rehearsal” for what we’re going to see? Thinking back to other incidents in history and given this same setup – Fed tightening, rates going from nothingness to somethingness, hawkish tones, reversal of long-term stimulus programs, U.S. inflation @ now 40-year highs, and a total ass-clown running the White House and his Clown Jr. running the office of the Vice President. And given that whole list of “somethings”, to me anyway, looks very un-inviting to a large group of “growth” companies. Not to mention all the SPACs and the birth of Crypto-this’s and Cyber-that’s… just seems to this man to be a rather “fugley” scenario brewing. Like a giant hole is being dug that we will one day find ourselves climbing out of…
But if you watch the financial news and their resident financial gurus, everything’s wonderful! No, it couldn’t be better to these folks! They’re looking out at the economy and the financial markets and Diaper Joe and they see not a cloud in the sky. They are also hugging the new kid in town – an inflation rate with a 7-handle on it. And they’re saying things couldn’t be better, you know. That attitude of complacency is another great signal for me… remembering, once again, that the general public gets about everything wrong, really wrong! 🙂
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Fugly is appropriate in this case.
Profitability may be back in style, a real measuring stick.
P/E ratio N/A
P/S ratio 75x
Not working in this market and is sold off on every pop, even those already down 75%. This shall end however with most not chasing value, growth wins in the long term but, needs a damp towel laid upon it.
What truly kills me are peoples expectations; did you ever outperform the S&P 500 on a portfolio? I hope not. In the real world people have to look at risk adjusted rate of return, cash for emergencies, income and other factors come into play. I don’t think sub tech has completed it’s washout.BTW, your son was quite generous to me today. He beat me on tie breakers…. Good young man, he’s a keeper.
Yes, I noticed that and sent him a text about it. Looks like he guessed correctly on several over/unders. Can’t remmember if there were more than five or not. When I was running money I rarely outperformed the S&P in portfolios because most clients wouldn’t be comfortable with 100% exposure to equities. So unless a fund is running 90+ % weighting in equities it is difficult. However, technology as a sector was the place to hide back in the 2008 implosion, I was way overweight in tech which was a great place to hide back during the lousy Obama years. Now, every dollar invested in the S&P 500, 35% of that goes into technology – no thank you! I remember back when the market collapsed in 2007-8, financials held a 35% weighting in the S&P 500 back then. And look where the trouble originated, banks!
I’m going to write a post about bubbles, and why they burst, and why few can see that train coming. It’s impossible to time anything but most clients ignore warning signs.
Looking forward to it.
Thanks! I started writing it, looks like a longer than average edit for me.