Bloomberg: Apple spared near record ‘tech wreck’

From Vildana Hajric’s “Number of Nasdaq Stocks Down 50% or More Is Almost at a Record” posted Thursday:

apple spared tech wreckA near-record number of tech stocks have plunged by some 50% in an echo of the dot-com crash.

Roughly four in every 10 companies on the Nasdaq Composite Index have seen their market values cut in half from their 52-week highs, while the majority of gauge members are mired in bear markets, according to Jason Goepfert, chief research officer at Sundial Capital Research.

“Whatever the fundamental and macro considerations, there is no doubt that investors have been selling first and trying to figure out the rest later,” Goepfert said in a note.

Another way of thinking about the tech wreck: At no other point since the bursting of the dot-com bubble have so many companies fallen like this while the index itself was so close to a peak.

“Valuations are at historical highs, companies are raising billions based on fairy dust, and the Fed is signaling a tightening cycle,” Goepfert said. “All of these are scaring investors that we’re on the cusp of a repeat of 1999-2000.”

My take: Apple has also fallen from its all-time high of $182.94, but by less than 6%.

21 Comments

  1. Jonny T said:
    Crypto currencies are next perhaps? Kazakhstan is the world’s second largest mining hub and look what’s happening there.

    Take flight to a safe haven: AAPL.

    8
    January 7, 2022
    • Tommo_UK said:
      Jonny,

      In theory, less mining equals fewer coins which should boost value, but since when did common sense have any place in crypto.

      5
      January 7, 2022
  2. Jerry Doyle said:
    “…. My take: Apple has also fallen from its all-time high of $182.94, but by less than 6%.”

    Exactly, PED. And as I write this comment Apple is up .85 lapping close to $173. Apple almost has been insulated in this tech sell-off because of its potential for growth in new products, its superb performance in continuing to drive revenues with strong margins and its huge cash reserves. Many investors see Apple during their concern with rising interest rates as a safe haven to remain invested in the markets getting outsized returns. I am confident that we soon be back at our ATH.

    5
    January 7, 2022
  3. Fred Stein said:
    Ever since the meme investing craze started, I’ve been hearing from people who know nothing about investing talk about their hot idea that they heard from someone else.

    This tech wreck would remain confined to these meme stocks., AAPL, the safe haven, will do fine regardless of any potential turbulence.

    3
    January 7, 2022
    • Tommo_UK said:
      Fred, don’t forget for the majority, AAPL looked like simply a meme investment stock for a long time too – a company with “an obsessive fan base and investors who would say anything to justify their reckless investments in it” 😉

      5
      January 7, 2022
      • David Drinkwater said:
        I’m not heavily invested in Tesla, but I am enthusiastically invested in Tesla. 20 years ago, I was not heavily invested in Apple, but I was enthusiastically invested in Apple. Today, I am hugely invested in Apple (~30% of my net worth). I hope that same repeats for Tesla.

        We shall see.

        2
        January 7, 2022
  4. Jerry Doyle said:
    @Tommo_UK: True, Tommo. When I made that Apple investment of $3500 in July, 1997 for my daughter that now is a little north of $6,000,000 it was an effort to take advantage of the news that day that the governing board fired Gil Amelio. I truly believe someone would swoop in and pick-up the company because of its brand name and attempt to turn the company around. I did not consider the $3,500 at the time as reckless on behalf of my daughter, although the amount for myself as an investment I was a little uncertain about what I was doing. Of course, in retrospect it was the most economic judicious decision I ever have made in my life for myself and my daughter. You are correct, though, to say that the two investments never would have been made if it were not my belief that someone would pay to own the Apple brand. It pretty much was assumed the company was going bankrupt. I had no idea that the person who would step forward would be Steve Jobs himself.

    8
    January 7, 2022
  5. Robert Paul Leitao said:
    QE is coming to a screeching halt, interest rates will be rising and there’s chatter the Fed will begin to unwind some of the holding on its balance sheet. There’s nearly 3,700 equites traded on the NASDAQ and thousands of these equities are very sensitive to interest rate changes and the pace of economic growth. Where there’s the prospects for outsized rewards there’s also the presence of outsized risk. The sell-off is indicative of the market adjusting prices to the presence of greater risk at this time.

    0
    January 7, 2022
    • Kirk DeBernardi said:
      Robert PaulL. & Sacto Joe —

      One has to remember that tech has had a great run-up over 2021 and there’s every indication that “software is (still) eating the world” and tech will continue to be “where it’s at”.

      However, I’m beginning to think that segments of overall business can “catch a virus” of FUD that plagues them for a term. We might be suffering this now. Not a hiccup, but a term of time with an attitude “illness”.

      If I’m right, AAPL will probably stall in this environment and — like so many times before — we end up having some dead time pass until investors again realize that tech (including AAPL) is “where it’s at”.

      A perplexing segment pendulum swing that, in a final analysis, might be long-term healthy as a tempering factor because we love to immediately believe our holdings in the market will rise in constant perpetuity when times are good, yet at the same moment, immediately forget that there are these requisite moments of pause and/or pullback.

      A fact of the motion of this beast.

      1
      January 7, 2022
      • Robert Paul Leitao said:
        Kirk: Is Apple a major tech stock, a global consumer products and services powerhouse or both? Answering that question also answers why Apple may trade differently than most of the equities on the tech-heavy NASDAQ. From my reading, a major adjustment on prices in the tech sector has been forecast. Caveat emptor.

        4
        January 7, 2022
        • Kirk DeBernardi said:
          Robert Paul L. —

          The usual word “adjustment” or “correction” conjures up an active intention.

          I prefer “virus of attitude” as the underlying business supporting these prices — like the turning of a ship — doesn’t change as sporadically as attitudes can and do.

          Emotion is a cousin of attitude. Tough to strip one away from the other.

          2
          January 7, 2022
          • Kirk DeBernardi said:
            Much like Gregg Thurman’s “Investor Sentiment” as a replacement for PE ratio.

            1
            January 7, 2022
          • Robert Paul Leitao said:
            Kirk: I’ll use an old-fashioned word: Stampede
            It’s among the reasons I choose not to play in the small cap/mid-cap space. Nothing wrong there and there’s plenty of opportunity. I’m getting choosey as to which roller-coasters I want to ride.

            2
            January 7, 2022
  6. Kirk DeBernardi said:
    Nothing like ridin’ on the good ship Apple with the Apple 3.0 motley crew.

    Harrr!

    3
    January 7, 2022

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