I noticed a huge dip in my portfolio last year in December. I’d kind of forgotten, because it came back up before the 31st. But I was looking back through our board, and I saw some thoughts from Bert that Saul posted: https://discussion.fool.com/ot-bert39s-take-on-the-markets-34091…
A lot of them seem to hold this year too. Some highlights:
I will suggest that the share price performance lately has become completely disconnected from the operational outlook for these companies.
In the short-term stock prices are determined by supply/demand criteria, and there has been lots of supply and negligible demand from institutional buyers.
150 hedge funds are closing their doors on December 31st.
Markets are made of the constant struggle between fear and greed. While fear is in the ascendant at the moment, the operational performance of high growth companies will be at levels that ultimately change the feelings of portfolio managers. Hedge funds are paid to invest and not to hold cash.
I do not think I am a Pollyanna or that I am ignoring real risks. The Fed may not behave rationally. Some misguided government policy may lead to a problem that proves to be intractable. But that said, the IT sector is on sale now. The sale might last a bit longer. I really can’t foretell the specific event that will break the pessimistic, self-reinforcing cycle. But markets are eventually rational, even if that is not totally visible at this point.
[Bear again] Long story short, a lot of weird stuff goes on with hedge funds in December.