We've been seeing many occurances of stocks with overblown P/E ratios start to return to earth recently, with Roku being the latest example.
With the current state of macroeconomic factors(inflation, impending raises in interest rates, supply chain issues) coupled with the recent political climate(possible war between Ukraine and Russia, people running out of unemployment and stimulus checks no longer being handed out): the average person is being hit with the realization that we at best are due for a correction and are at worst heading toward a recession.
There is a lot of money to be made on the way down just as there was on the way up. We are heading into a time where even if a company has a great earnings report, they are still hit with the reality that the growth of the market the last couple years is unsustainable and their share price subsequently will also take a big hit.
We are going to continue to systematically see companies return to fair value, those with the highest P/E ratios being the biggest victims.
Which companies and sectors do you guys see being next to fall or continue to fall?
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