Well, we’re seeing this again, no guarantee that it will bounce back tomorrow, esp with summer volumes, but I’d imagine that Fri and today’s selloff is at least partially related to the funds that are meeting redemptions and must sell by today for T+2 settlement.
Or they may also need to reduce margin, same equation.
Just checked and it’s getting worse, ouch!
Obviously, there are other things going on in the market/world.
There’s no meaningful news/reason I’ve seen for the sell-off. Especially on an individual basis with the companies I own.
Based off the strength semi-related earning thus far (MSFT (Cloud Services), AMZN (AWS), Atlassian, etc).
I think many of our cloud/tech enablers are going to report great earnings.
I’m not taking any action right now, but if the sell-off deepens, I will definitely look at add to my top 3 ideas.
I’ve got plenty of time to leave my investments alone so everyone’s situation will be unique.
The reaction of the technology (define that as you will) sector and growth stocks, in general, is more than likely directly related to the latest GDP growth statistics.
It paved the path for additional rate hikes.
Rate hikes mean higher interest rates
Higher interest rates mean higher debt costs
Who uses a lot of debt and foregoes profits to build the business?
You guessed it.
This is a very classic response. I’ve had a quite enjoyable day today and feel very good about my long term prospects.
Just a Fool
Who uses a lot of debt and foregoes profits to build the business?
Incorrect. Most of the companies discussed on this board have little to no debt.
Bear
The reaction of the technology (define that as you will) sector and growth stocks, in general, is more than likely directly related to the latest GDP growth statistics.
It paved the path for additional rate hikes.
Yes, partially, but then the selloff should have been worse on Friday. It’s worse today -so far- because of T+2 to add liquidity before month-end for funds that must have or just want to have it.
Also, window-dressing goes hand-in-hand with this behavior.
Bear,
I think that’s where our opportunity lies. Actually, I think that’s why individual stock picking wins.
Our companies are being dragged down with other companies that they are associated with because of reasons that don’t necessarily apply to our businesses.
Our job is to understand our companies and separate the signal from the noise.
These are the type of situations that define investors and what our long term performance will be. How will we react?
The reason these Hot AIR stocks are going down is because they are extremely overvalued.
The FB earnings created some (justified) panic in the market.
You are all like the mice in the The Pied Piper of Hamelin following the Piper into your own demise.
I don’t know when all the potential losses are going to materialize, but I have no doubt it will happen.
You’ve been warned.
There is no need to argue with me, I don’t hold even one stock out of your list.
I am in different dimension (Value Investor). The problem with you is that you don’t even realize you are momentum investors.
The ones who do realize that, are using technical analysis to try to time the market.
Many more fail on that than succeed.
You are not even trying to do that, you are acting like the companies you are dealing with have wide moat and value.
You’ve been warned before you are warned now.
Do whatever you think is right for you, after all it is your money on the line.
I wish success to all of you.
I won’t waste my time trying to figure out why stocks are down. They do that from time to time. You can always find after the facts “reasons” , humans are good at that. But not so good at distinguishing correlation from causation.
I see no change in the fundamentals , FB is not even close to being in the same business as my stocks, and rising short term interest rates are not incompatible with stock price appreciation.
You’ve been warned before you are warned now.
Do whatever you think is right for you, after all it is your money on the line.
Nice of you to show concern but suggest you read up on what this board is all about. We take the rough with the smooth days in our stride.
I have been following the investment ups and downs since early January of this year and notice the big drop happened around end of month. Coincidence? or is there something else? Thanks.
Lily
The reason these Hot AIR stocks are going down is because they are extremely overvalued.
I love it when posters such as your self come over here on a day like this and make these sorts of posts. The problem with your post is that I’ve been doing this since 2006 with annualized returns of 24% and some change. Prior to that, letting others do the work for me got me 9% with a predominantly value based approach. I think Saul’s is even better than 24% over the last 20+ years. Even on a crummy day like today, I’m up over 40% this year alone and just over 100% yoy. Momentum? So I have 12 years of momentum and Saul has 20? I think you should look up the definition of momentum investing again. You purposefully ignore the annualized returns over many years of the many investors who frequent and post on this board. If value investing is your world, great. Good for you. Take those average yearly returns and be on your way. I see nothing wrong with that. But your post is nothing more than self aggrandizement in order to promote your investing narrative. People like you have been “warning” me for over a decade and I’m still waiting for the ceiling to cave in…
Best of luck to you as well,
MC
You hit the nail on the head HeartMD. I was up over 15% this month, and lost maybe 9% the last two days. So I am up ONLY 6.4% this month. Will the poster be up 6% this year??? Saul has a pretty good system, all you have to do is pay attention.
Shukisasson, It would be good to know your age and investing experience. Since you seem so adamant about your advice it is important to put those types of things into perspective so I can adequately assess the validity.
I am always open to learning.
It’s been a bad day. My investments took a beating today. In fact, my worst day percentagewise and absolute dollars in the three years since I’ve been keeping records. That leaves my up only 33% for the year, recently I was up quite a bit more. And my cat got in a fight a week ago. An abscess came up last Thursday. I took to the vet on Friday. He was supposed to get the stitches taken out and the drains removed today, but the vet said he’s not doing well. He had to be hospitalized. Of the two events, I’m more concerned about my cat than my investments.
The way I see it (and I admit, this is speculative, I don’t have any special knowledge) tech stocks tend to be considered as a group. Facebook sent a chill through the sector. That started a sell-off which hit some magic threshold and algorithmic trading triggered a rapid sell-off. That rippled through the entire sector with little regard for specific businesses.
And I’m sure there were other factors as well. I don’t see anything fundamentally different about the companies I’m invested in today than I did a few weeks ago. As I see it, nothing has really changed other than stock price.
Hydemarsh it doesn’t matter what is my age or what is my experience.
It does matter what the super investors are advising and doing.
It is better to learn from their advice.
You can start with the Intelligent Investor by Ben Graham.
The Warren Buffett way by Hangstrom.
Or try to find on the web a book named Margin Of Safety by Seth Klarman.
Take it from there…
As Buffet says: Price is what you pay, value is what you get.
If you don’t care about the value of what you buy, then why are you making the investment in the first place?
Who uses a lot of debt and foregoes profits to build the business?
Incorrect. Most of the companies discussed on this board have little to no debt.
Bear
Even if companies carry debt it isn’t just a binary calculation, either a yes or a no. When the borrowing is done in a very low interest environment that is very different that a person who owes too much on high cost credit cards. If a company is AAA rated and can get money very cheaply it shouldn’t be too hard to outgrown the cost of the interest. Then the debt would be beneficial.
All debt is not bad debt.
Jeb
Hi “Shuk”,
I am an old man and have made millions of dollars in growth investing. Years ago I read and studied Ben Graham and have closely followed what his protégé have written and accomplished. Value investing can produce good results (beat the market). My investments in BRK/A in the early 80’s produced the wealth I needed to sustain myself in my old age.
However, as I have created foundations and funds to further the value systems in which I believe I have chosen a different course.
The ship I am steering is very different from the ones the so called “super investors” steer. I usually do not have the tax consequences and the way I structure portfolios when I do trade or change positions it does not have a market moving effect. I think I am capable of making a higher return with less risk. I personally think it is very risky not to buy the very best companies; those fastest growing companies, with great management, limited competition, whose products and services can deliver capabilities at lower cost and higher margins.
For the last 10 years I have followed a growth investing mentality. I know the value of the company, I learn the ins and outs of what they do and why they are successful. I track them closely to understand how they are progressing against my investment thesis. This approach has produced a compound annual growth rate of at least 30% (the last two years over 50%).
With all this said I would encourage you to think for yourself.
I ask about age because I have a foundation that pays college expenses for what I deem to be worthy candidates. Every year we get together and discuss how their college experience is going. I am becoming increasingly dejected by the way students seem to be less thinking for themselves and more regurgitating a mantra about one subject or another.
To me it seemed like you had “discovered” guru focus and were regurgitating the mantra to a group you do not really seem to understand. I am sure you are smarter than that. It appeared to be the way my most recent students were behaving. It came across as “Your way is the only way and if anyone disagrees with your belief system they are wrong.”
I hope you will take this the way it was intended. Your investment strategy may be the strategy for someone with your temperament and goals. It may not be the best way for others with a different temperament and goals. These guys do not have to be warned, they are big boys and know what they are doing.
I received a masters degree in computer science from MIT way back in the 1970’s. Spent a lot of time in Silicon Valley. Got to know a lot of great thinkers. They all did things differently. It was the different way of thinking, acting, and delivering that produced the wonderful marvels of today’s world.
A lot of individual thinking about investment thesis takes place on Saul’s board and NPI. People share their thoughts and these thoughts produce results.
good luck in your investing future.
My humble apology to all, I meant to send a private message.
i for one am happy it did not end up private.
Tinker
Hyde,
That was an incredibly thoughtful response. +1 for being thankful it was not private. I was actually going to suggest it gets added to the board featured messages (or even the knowledge base).
Thank you for writing that.