I am lost with the sentiment on this sub and curious folks true thoughts on the markets. I am not a financial analysis, I don’t even work in finance. I can, for the most part, read the 3 sheets, and have an understanding of the basics of corporate finance (again, not an expert). When covid hit, stocks dropped sharply (no brainer). Then, shortly after the initial drop, money poured into safer, large cap tech stocks. I mean poured. For example, from the end of March 2020 (post-crash) till early august, Apple almost doubled in value from their Covid low, and increased some 50-60% in value from their pre-Covid value. That’s insane for a blue chip stock in just a few months. This wasn’t due to some fundamental change in earnings or the way Apple operated. I very much took it as investors moving their money to Covid-safe companies. And we saw this occur in a number of companies that heavily weight the S&P. These gains continued until mid-2021, and in some cases, companies had strong earnings to warrant some of the gains in valuations (well in a lot of cases a LOT of companies posted strong earnings).
My long winded point is that valuations grew for the majority of the market from speculation, or movement of money to stocks based on safety and risk, not from strong fundamentals. From a very high level view (without taking into account any technical analysis, because again, I’m not analyst), it would make sense the market corrects to a large degree, at some point. And by correct, I mean affect the boys, not just the shit speculative stocks we saw deflate this past year. I’m lost on the sentiment on why this is surprising, why anyone could disagree with the valuations (again, Apple for example gaining some 60% pre-Covid value, just a few short months after the sharp drop) being inflated. I see people arguing companies strongly quarterly or annual earnings. But it cannot justify a near 130% gain (ie, Apple) in a year and a half. It’s as if we almost forgot the tremendous gain these companies felt after the covid drop, from simply being safe tech stocks. My thesis: even at 20% discount over the last 8 or whatever months, the NASDAQ is still overvalued
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