samedi 18 décembre 2021

High-flyers becoming low-flyers

You're a fan of super exciting stocks? You thought that stocks that went up 50% for the first part of the year would never come down?

You didn't see inflation coming, you didn't think that COVID would never stop and you thought that a PE of 100 would be sustainable forever? I can't blame you, everybody does that kind of mistakes. Everybody buys stocks with a PE of 100. 

Here's the performance of a few high-flyer stocks over the last 3 months: 

Sea Limited: -37%
Mercadolibre: -37%
Block (formerly Square): -35%
Paypal: -33%
Wix: -32%
Upwork: -32%
Roku: -27%

The problem with these stocks is that their valuation either didn't make sense or it was very high. When conditions are less exciting (inflation, higher rates, slow economy, etc), these stocks are usually hurt the most.

You've had it in the ass. I just hope that you were intelligent enough to own only small positions of these stocks. Otherwise, you've had it very deep in the ass. 

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