Wow! What a disastrous day!

Wow! What a disastrous day! This took my portfolio all the way back to just six percentage points above where it finished WAY BACK on August 31, 2020… Oh wait, that was this Monday!

(:grinning:! I thought a little perspective might be helpful.)

Saul

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Zoom is up 17.3% from August 31, 2020.

My portfolio is up $5.17 for September.

What’s not to like?

Denny Schlesinger

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My portfolio is up $5.17 for September.

Treat yourself to a Starbucks Grande and you’ll still have change for the tip :sunglasses:

🆁🅶🅱
post tenebras lux
For not in my bow do I trust, nor can my sword save me.

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Since I do not enjoy the prevalence of having Zoom in my portfolio (which I myself gave up prematurely and foolishly), I was hit quite hard… with my portfolio back to where it was last Friday :thinking:

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Saul,
Thanks for the perspective. It Helps. But being a newbie, super dumb question here, what causes these type of mad sell-offs?
I mean everyone loving tech and SaaS stocks and then all of a sudden everybody wakes up and says “today we dump these overvalued Tech stocks”??
I though CRWD had a pretty decent earnings call, yet their stock started to get dumped even before the rest of the clan.
Anyways, I am sure these wild swings have happened in the past and will happen in the future, but I am hoping if you don’t mind sharing your perspective on why these type of sell offs happen and how we should (or you would) go about them?
Thanks

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. . . what causes these type of mad sell-offs?

This post from the MI board provides some perspective:

https://discussion.fool.com/understand-it39s-also-end-of-hedge-f…

BLancaster

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what causes these type of mad sell-offs?

Considering that there were two days of sell-offs following two days of wild gains, why not question the gains as much as the sell-offs. OK, some of the gains for some people came following an earnings report, but today’s carnage was following earnings reports for MDB and CRWD, both of which should have been positive, especially MDB, but which were included in the movement. Do not expect short term logic from the market.

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I took today as an opportunity to do a bit of selling of positions and reshuffling into my winners. Trying to trim the fat and make my portfolio a little more “Saul-y”. One thing this board has done for me is to make me much more confident in the stocks I hold, there’s some great research and information here. As a relatively young investor, thank you!

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“what causes these type of mad sell-offs?”

This question, of course, is quite off topic for this board.

But the correct answer is: who knows?

which may be one reason the subject is off topic.

There are those who say they know the answer, and some have considerable intellect which they expend on impressive sounding analysis. Sometimes they are hailed as correct. None are always so hailed and none can ever prove that their analysis was ever correct because that would require a counterfactual.

For our purposes, we here think none of that matters.

What does matter is that our stock holdings outperform the rising broad indexes over time most of the time. Most of us can credibly attest that our portfolios have done so over decades, and thanks to Saul, others, and our own research, we have done particularly well recently, since we hit upon the leaders of the emerging technological evolutionary landscape, i.e the SAAS, subscription, cloud, hypergrowth stocks securitized by amazingly high dollar based retention rates.

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No. of Recommendations: 1
what causes these type of mad sell-offs?

IMHO there is a lot of money in various large funds which is used to trade the market, far outweighing the influence of retail investors. And there is also program trading.

So all tech moved up in a frenzy in anticipation of some event, this time quarterly earnings and then when targets were hit the selling began en masse. Nothing personal.

cheers

arnie

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I though CRWD had a pretty decent earnings call, yet their stock started to get dumped even before the rest of the clan.
Anyways, I am sure these wild swings have happened in the past and will happen in the future, but I am hoping if you don’t mind sharing your perspective on why these type of sell offs happen and how we should (or you would) go about them?
Thanks

iCAAN

As I mentioned in an earlier post there are alot of big players out there. It takes a bit of fortitude to stick with your investment plan and hold on during the gyrations.

As an example I came across the following.

https://www.cnbc.com/2020/09/04/softbank-reportedly-the-nasd…

This is an example of money mangers betting billions to juice the price of tech stocks in order to dump them at a profit.

According to the Wall Street Journal, SoftBank had made regulatory filings showing it bought nearly $4 billion in shares of Amazon, Microsoft, and Netflix, plus a stake in Tesla. The paper quoted a source saying that SoftBank spent roughly $4 billion buying call options tied to its stock holdings, but also in other names. It then could profit from the run up in stocks and subsequently unload its position to other parties.

So its best to ignore the market excursions and keep your eye on the prize.

cheers

arnie

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Thanks Arnie,

For those who are interested the CNBC link in turn provides the SEC filing link: https://sec.report/Document/0001062993-20-004032/

Tolerance of short term volatility is a new skill for me, which I have slowly been gaining thanks to the wisdom so many of you have shared. Seriously: I’m super grateful despite not having seen much fiscal benefit, due to my only having started investing in individual stocks 2 months ago.

Can the market really be responsive to trades as small of SoftBank was making? I say ‘small’ in that many of the companies we discuss are on their list (NVIDIA, Netflix, Mercadolibra, Splunk, SHOP, ETSY, OKTA, SEA, etc.) but the trades ranged from $58M (SEA) to $114M (SHOP). Those purchases are nowhere near sufficient to explain the recent rise in prices via supply and demand. Rather, the volatility must be algorithm driven computer trades (or fairy dust).

My point is that Benjamin Grahams quote ‘In the short run, the market is a voting machine but in the long run it is a weighing machine’ is even truer today than back when it was first posited.

For neophytes like me I strongly recommend reading Saul’s Knowledge Base Part 2, today. It makes sense, and helped me to maintain confidence to think in terms of years rather than days (especially when Parts 1 and 3 are added it!).

Thanks to Saul and all of you,
Larry