The NASDAQ is falling as tech stocks begin to show cracks in their armor. Of course, according to Mr. Valuation the reason is simple – most tech stocks are overvalued. Consequently, it is only a matter of time, even inevitable, that value will shine. Frankly, this is as it should be. As the venerable Warren Buffett put it, price is what you pay value is what you get. Investors have been pouring money into tech stocks taking them to nosebleed valuations and it appears that they are starting to get the value that Buffett spoke about.
In contrast, value stocks have been all but ignored but are beginning to shine. According to a report by Bank of America, value stocks outperformed growth stocks by the largest margin since February 2001. According to Bank of America, they believe that rising rates have triggered the rotation. However, they originally said that in March, and the momentum continues to build.
With this video I am going to single out two tech stocks that just today, May 10, 2021, were falling 20% and 25% respectfully as I produced this video. Let me repeat that. Both stocks have fallen over 20% in a single day, and frankly, they remain significantly overvalued based on fundamentals. This is the danger of significant overvaluation. It can change in the blink of an eye and catch investors completely off guard.
FAST Graphs Analyze Out Loud Reviewing Magnite Inc (MGNI) and Trade Desk (TTD)