Looking through the Reddit forums, I can see a lot of people have been burned pretty badly. Quite a few hype stocks are trading around half of what they used to be a few weeks ago (Palantir, Nio, Lemonade, C3.AI are the ones off the top of my head). There’s blood on the streets, at least for the tech sector right now.

The supposed reason of raising interest rates for the downturn baffles me. So bond yields raise to 1.5-1.6%, and everyone panics? People are selling out their tech and growth stocks to go into treasuries, airlines, and cruises?

Completely irrational if you ask me. Is 1.5% an attractive return? I think you know the answer to that. It won’t even cover inflation.

In addition, are the value plays really going to perform? The casinos, oil players, hotels, and cruises have been holding up well. No brainer to assume that most people are dying to travel.

But most of them took on a lot of debt to survive. This needs to be serviced and will be a drag on growth. I also think people are way too optimistic on a return to normalcy quickly. Got vaccine doesn’t mean magic cure. Not everyone is vaccinated. There are virus variants, and governments will be cautious. No one knows how long vaccines last either. I’m fairly sure that even if vaccinated, we will still be wearing masks and social distancing for a while.

Travel and entertainment will probably still have restrictions, whether they are due to government regulations or lack of industry capacity. Industry capacity (seats on planes, rooms in hotels, etc) will be weak initially, as people have been laid off and hotels closed. It takes time for people to be rehired, hotels to open up, opened up, planes to be bought etc.

Just speaking from my point of view, I won’t travel if its expensive, overcrowded, or dangerous. I’ve waited over a year, I can wait a bit more. A drive up to Malaysia will be plenty for the start.

The Death of Growth Investing?

It’s hard to be a growth investor now, with everything down. When I look at my portfolio, I seriously want to puke.

But investing does depend on your convictions and world view. Do you think we will go back to normal quickly? That we will stop remote work, online shopping, and ignore climate change?

I don’t believe that its the end for digitisation, cybersecurity, climate change, and electric vehicles. These are trends that will continue, pandemic or not. Slightly higher interest rates won’t reverse them either.

The turmoil now is irrational and will blow over. My guess is that by 3-6 months, we would be back to where we were, or at least it won’t get much worse. We are about halfway through Mar 2020’s drop of about 20%, and it shouldn’t get worse than that.

I added to my holdings on Thursday night:

20 shares of Paypal at $249.4 ($4,988)

150 shares of Corsair Gaming at $32.7 ($4,905)

25 shares of Crowdstrike at $192.6 ($4,815)

Total = USD $14,700

A pretty modest amount overall. Really scrapping the barrel here for more money. I think even those who were prepared are getting low on ammo because the dip has just kept dipping.

I haven’t sold anything yet, though I’m thinking about it. Some holdings like Google and S&P 500 ETF haven’t been hit as hard. Maybe I’ll liquidate a moderate amount to direct into cheap stuff. Eyeing Palantir, Nio, and Tesla. If there is a big green day in the coming week, I’ll likely sell something.

Stay safe and have a good weekend everyone!

9 thoughts on “[Premium] A Brutal Week

  1. Gamestop is still holding steady :). I think it’s good to split a portfolio, into index funds for long term growth, and individual stocks for aggressive plays. Nothing new for normal folks. But then again, from an investing perspective, you are beyond normal, haha!

    1. Gamestop is a good hedge! The only one green in a sea of red! haha!

      I think I can be better diversified, will start to do that once my growth stocks recover. A bit regretful I held them on for a long time, but no telling when the party would have stopped. I do believe that they will recover and beat the market

  2. Yes, I always remind myself to be greedy when others are fearful. Added PLTR last night @22. Funny how this is occuring at the anniversary of last years March 2020 crash

  3. So far it seems that BTC has also been a reasonable hedge. With all the talk about inflation, its price has gone up. I’m still not invested in crypto though as I have issues with its lack of intrinsic value

    1. I have been surprised by how BTC has held up well, while both bonds and stocks have fallen. Really helps the argument that BTC can be used for diversification. I think others are noticing too.

      I totally agree with the lack of intrinsic value.. its useless as a currency. But people are holding it as a hedge, and at least for now it seems to be working.

  4. yup paper loss of close to $100k in just a week! still have some fire power waiting to be deployed~lotsa of volatility in the HK and US markets but pretty confident my stocks will hold. Risk free rate aka 10 yrs treasury has almost tripled in less than a year from 0.5% to 1.5%, therefore reducing coy valuation (DCF) esp. the tech stocks which have a much longer horizon

    1. I think I might have lost twice that! A bit afraid to calculate net-worth now haha. If you have good stocks, just hold! That’s what I’m doing.

  5. A relatively minor disturbance if you’re diversified. Occurs roughly twice a year on a long term timeframe.

    A buy the dip event.

    Economy is getting stronger & stronger.

    1. We are in a strange place where stimulus and an improving economy is causing the market to go down. Sort of parallels what happened last year when the economy was in tatters but the market went up like crazy.

      More panic online because many millennials have concentrated holdings in things like Tesla and Nio. They are leveraged in margin and options too. Hopefully it doesn’t spread to the wider market. Might be in real trouble then!

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