Mr Market continues to get rid of growth stocks, many don’t have earnings. So far about 40-80% drawdowns from ATHs. During dotcom bust, such stocks decline by at least 90%, many disappear… will this happen similarly?
The strongest of the lot eg NET CRWD DDOG are now taken to the gutter too. No E, gutter. Not big enough E, gutter. Cash rich companies eg FANGMANT, would acquire these growth stocks for a song.
I think one element to look at will be their business model (money flow model) without getting into mathematics. Do these companies have have viable products, and are there customers who will buy these products?
In dotcom, they didn’t even have revenue. They created the new eyeballs metric.
The companies that are cash flow positive will be fine. Earnings is something accountants made up. Companies don’t go out of business over earnings. It’s cash flow that causes the issue.
Stocks related to e-commerce will struggle. Their growth rates are slowing compared to Covid revenue growth rates. People are selling everything though even the ones that aren’t impacted by a slowdown in e-commerce growth. It’s the same old ignorant sell everything approach.
Yep, I agree. I think that won’t happen until there’s a panic sell in the market. All the leverage needs to unwind imo. I think a 20-30% S&P correction might do it for the fed to panic…
I have no cash left except the ones that I can borrow. I am calling it bottom too.
Over the next few months I am seriously getting into cryptos also. For cryptos, this year is same as what 1994 was from internet point of view (the year Netscape went IPO).