How Low Can Tech Go? - from Exchanges at Goldman Sachs
https://megaphone.link/GLD9657282291
Thought I’d share this podcast as I found it interesting. Many of us are invested in and interested in tech and, while focused on the US market, it reinforces some key general themes. One theme I am focused on is that the eventual bottoming out of the market selloff in tech will present a once in 5-7 year opportunity to make sure we have quality stocks in our portfolios.
Two other themes of interest:
- Focus on firms that have operating leverage, as these will rebound strongly (but clearly for the most part haven’t been hit so hard)
- Tech that makes businesses more efficient are likely to do well in an inflationary and recessionary environment, as their B2B customers focus on cost out.
In that respect $TNE, WTC and $XRO remain core holdings for me IRL, and I am still mulling over whether I return to $ALU.
You know it's going to be a rough day when news headlines use adjectives like "plunge", "plummet" & "tumble"...
At times like this, the big questions for me are:
- Do I believe my companies will still be around in 5-10 years, and have materially higher (per share) earnings at that point?
- Can my businesses weather difficult conditions in the interim, without relying on highly dilutive capital raisings?
- Is the current price fair given those expectations?
- If possible, should I be looking at adding to my positions?
Stay strong folks, and don't let the monkey part of your brain call the shots.
The stock market has bounced nicely in the US overnight. Hopefully the momentum is starting to turn for tech stocks. Unless there is a Black Swan event before Monday tech stocks should get another boost.
https://www.google.com.au/search?q=nasdaq+index&ie=UTF-8&oe=UTF-8&hl=en-au&client=safari
(Australian Financial Review, 14/5/22)
Some more charts on how rough it is out there right now -- if you're a tech investor...
Here's the long run performance of the All Ords, overlaid with the percentage drop (the drawdown) from the previous all time high:
Honestly, the current drawdown of 7.2% is nothing. Not even a technical correction.
The story for tech stocks, however, is a lot different:
Almost as bad as the meltdown when covid first hit.
It's rough out there.
(I tweeted this out also)