Returning to Pre-Covid Prices?

As much as I enjoy doing stock analysis, I am starting to notice an emerging pattern: many stocks are returning to their pre-covid prices. That is, all the gains over the past two years are being washed away. This might help give some very rough guidance to the question of “how low can it go” and “should I buy the dip?”

For example, Apple was at $81 just before covid hit. Of course, you could argue that “Apple is a much bigger company that is was two years ago”, which is very true. But market sentiment seems to be tellng us that much of the growth over the past two years is unsustainable, and prices are resetting to pre-covid levels.

On that basis, Apple only looks cheap at $150 compared to the covid-highs, but still has a heck of a long drop ahead if it follows the pattern of “forget covid ever happened and return to pre-covid assumptions and prices”.

Tesla is another example: despite already having falled from the crazy mid-covid highs of more than $1200, the current price is still massively higher than the mid-feb 2020 price of $180. Again, you could say “Tesla is a much bigger company than two years ago”, but all the crazy economic gains over the past two years (both in terms of spending and in terms of share prices) are clearly being washed away by the market. So, the “reset” for Tesla is possibly back to the $180 pre-covid level.

Google is around $2300 nowadays, but was $1500 in feb-2020, implying that market sentiment may well wash it back down by another $800.

Facebook, on the other hand, was $214 in mid-feb 2020, but at $188 now, meaning that the “wash away the covid gains” has already happened. Facebook might now be a bargain compared to many other companies that still have a long was to fall in the “back to pre-covid” reset.

By the way, I am 57 years old, and have been through many market crashes. Sentiment is irrational during crashes, but at some point prices find a level again, and it looks to me that the level the market may well bottom at is where it was in feb-2020, before covid sent the market crazy.