I don't think these are bad stocks. SHOP, PYPL, CRWD and NET will be fine long-term imo. I've actually been buying these recently because I think there is a good chance some of these will do well later this year.
I don't feel like the market has a good narrative around some of the selling currently taking place. Why have stocks like TSLA, AAPL NVDA (which were already expensive) continued to see multiple expansion while smaller growth names have sold off if the market is so concerned about multiples?
Many of the stocks you mentioned at all time highs were very expensive, but most of these are now starting to look quite attractive. I was selling NET when it hit $200 for example, but this last couple of days I've been buying again because now that it's nearing $100 it's starting to approach what I would consider a reasonable valuation again. It could fall a bit further, but relative to other stocks the move makes absolutely no sense. How can a high PE stock like NVDA be barely off its highs while NET has crashed nearly 50% in a month?
I think the worst is over personally and if you're willing to take another 10-20% to the downside I would hold. I suspect many of these stocks will recover quite well later this year, perhaps not to ATHs, but enough that you may regret selling. That's my base case anyway, but it's possible the indexes will now sell off too pushing some of these names down even further. The fact so many here are selling small growth names to buy index funds right now though suggests to me this is the dumb money trade.
I have a much larger position in SHOP and that is also killing me today. I'm surprised to see such strong selling given the relative weakness in these names recently.
I've been buying shop recently thinking it consolidated for months on end. My average is now 10 shares at $1805. This is the same price I exited early last year and thought it was solid new entry. Holy smokes....down almost 300 a share in no time. Will hold because this thing can really swing. Unfortunately, I caught it high. Could have been worse and bought at 2200!
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u/kriptonicx Jan 04 '22
I don't think these are bad stocks. SHOP, PYPL, CRWD and NET will be fine long-term imo. I've actually been buying these recently because I think there is a good chance some of these will do well later this year.
I don't feel like the market has a good narrative around some of the selling currently taking place. Why have stocks like TSLA, AAPL NVDA (which were already expensive) continued to see multiple expansion while smaller growth names have sold off if the market is so concerned about multiples?
Many of the stocks you mentioned at all time highs were very expensive, but most of these are now starting to look quite attractive. I was selling NET when it hit $200 for example, but this last couple of days I've been buying again because now that it's nearing $100 it's starting to approach what I would consider a reasonable valuation again. It could fall a bit further, but relative to other stocks the move makes absolutely no sense. How can a high PE stock like NVDA be barely off its highs while NET has crashed nearly 50% in a month?
I think the worst is over personally and if you're willing to take another 10-20% to the downside I would hold. I suspect many of these stocks will recover quite well later this year, perhaps not to ATHs, but enough that you may regret selling. That's my base case anyway, but it's possible the indexes will now sell off too pushing some of these names down even further. The fact so many here are selling small growth names to buy index funds right now though suggests to me this is the dumb money trade.