Why did all the tech stock prices fall overnight??? Are they finally starting to adjust to reflect their actual value?? - Seedly
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Anonymous

Asked 3w ago

Why did all the tech stock prices fall overnight??? Are they finally starting to adjust to reflect their actual value??

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Nothing fundamental has really changed. In fact, unemployments in the US went down.

It is good for us to see a healthy retracement after a massive bull run. We don't need to see the stock market make new highs to keep the uptrend alive. This is a great opportunity to add positions if you believe in the fundamentals and business models of such tech companies

In the short-term, it is just noises. Let the long-term game play out.

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Valimtino Lim
Valimtino Lim

2w ago

Agreed. Especially on the "noises" part especially last week. Thankfully I had my "noise cancellation headphones" on all these while. Hahaha
Frankie Rappaport
Frankie Rappaport

2w ago

A must, haha
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Because it all tech stocks was way overvalued.

Apple P/E ratio almost 40

Tesla P/E ratio before split was 1000+

Tesla P/E ratio after split was 200+

Everybody wants to get rich quick and they think that the tesla bull run or apple bull run lasts forver.

Nothing lasts forever. Bull markets dont lasts forever.

Now those investors who have potentially lost money might be finicking to sell all of their shares.

But thats called day trading. Most times day trading dont work.​​​

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Maisul
Maisul

2w ago

Hi Jovan then we can use ev/ ebidta valuation method and pair it up with PE ratio. Or price to sales ratio. Pair the valuation method up to double check. And about PE assumes industries are the same that is wrong. You compare the PE of a tech stock to a tech stock. Compare the PE of a automobile stock to an automobile stock. I agree that different sectors have different PE median, again, need to do your research on that particular stock. Im going to make a whole video on how to value a stock from what i learned. Let me know how you value your stocks then would like to know more.
Jovan Lai
Jovan Lai

4d ago

Yup, so the way to use PE ratio is to compare with similar business and sectors. That’s correct to counter the fact the PE assumes it’s the same across industries. Yup I agree, EV/EBIDTA is another valuation method. Though I prefer A great value investor himself, Warren Buffett style of discounted cash flow. My issue with EV/EBIDTA, correct me if I’m wrong, but it does not take into account growth rate and discount rate. It also poses the issue of comparing companies within the same industry, which is very difficult for companies which have such strong moat in its own sector that no other company comes close to comparing. And that’s an issue to make a good valuation.
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Frankie Rappaport
Frankie Rappaport
Top Contributor

Top Contributor (Aug)

Level 9. God of Wisdom
Answered 2w ago

No, sometimes they just fall then climb on their 'random walks on Wall street"

Wait 18 months and reevalute what came about this current 'tech crash'

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Jovan Lai
Jovan Lai
Level 4. Prodigy
Answered 2d ago

Hi there, good to see you are keeping up with what happens! There are many interesting reasons that people like to give to short term fluctuations.

Ultimately, shorter term movements are driven primarily by market emotional sentiment.

Longer term movements are driven by valuation.

It is unlikely that stocks will adjust/correct to their valuation in such a short time frame. Bullish sentiment however, was high compared to past months just before the correction. Market sentiment is one of the most accurate indicators. Markets move opposite of what majority feel it’ll do. E.g. if too many are bearish, it tends to move up. This is difficult to explain on a platform as this but if you are interested I am more than happy to share why this happens using

  1. An analogy

  2. Countless of historical evidence

  3. Micro-detail of why this happens (stop losses and margin calls)

https://ycharts.com/indicators/us_investor_sentiment_bull_bear_spread

^ I invite you to use this chart and compare it with the S&P500 and see for yourself how accurate taking a contrarian view on market sentiment can be.

No one can predict/ time the market. But you can certainly listen to what the market is hinting to you. This pullback was expected the weekend before it happened if you understand the market.

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