yeah, but reality, at least to me, from a purely r/r standpoint is that a lot of the 2020 folks with very outsized gains (200%+) were ridiculously lucky riding a fomo/momo/yolo wave.
Despite many stocks being up 100% this year (DDOG, NET, UPST, etc) or at least up 100%+ off of lows this year, they are well below their 2021 or even 2020 peaks in most cases.
That is why an average is more honest and there was no surprise to me in seeing those huge gains offset by equally huge 2022 losses. The bigger surprise was the lack of profit-taking. And I get the retort “if I took profits at 40% or 80%, I would have missed the next 100% in gains!”. The counter is that you still suffered when you rode those gains all the way down.
ZM, UPST, DDOG, NET, SNOW
The other argument then is “yeah…but you get off the train when growth slows/stops. That is just smart!” Ok, and that apparently worked super well during a macro background of a growth-supporting environment and in a bull market. And it always proved my point that it was “momentum investing” with the variable for momentum being growth rates of whatever you wanted to measure (rev, gp, edbitda, fcf). Nothing wrong with being a momentum trader, I just preferred they were aware and/or honest about it, vs pretending they were long-term investors and that ZM was going to take over the world or whatever the stock price was telling them in that moment, detached from reality.
TTD is still at a late 2020 price. GLBE was twice as high 15 months ago.
AXON, ELF, IOT, and maybe CELH…are they doubling from here or crashing in a potential recession?
Someone will balk at that last comment. Of course, they were probably also balking when I thought ZM was overvalued, or SNOW when it was almost a double from here 3 years ago, etc etc
Not a perma bear. It is more about realistic valuations. Issue with the hyper-growth stocks was that they would bake in 5-6 years of growth right now.
Touting AAPL (as if you knew the iPhone was going to be thing from the also-ran computer maker) or AMZN (as if you knew AWS was going to be the goliath it was…if it was that obvious, every large cap in 2000-2010 should have been getting in the business of public cloud…it wasn’t obvious). I fought with my own company about the coming NVDA dominance in the datacenter back in 2015/2016 and was basically patted on the head and told they were a PC gaming company. Now of course their tuned has changed. So, yeah, I saw NVDA growing, and TTD ascending, and SPG rebounding off great valuations at the time. That is how I prefer to invest. To each their own.