Trending: Investing in Bitcoin / 5 reasons to invest in Amazon / Investing in the Metaverse
Wednesday, March 22, 2023
INVESTOR TIMES
  • Home
  • News
    How much will the fight with Kanye West cost Adidas?

    How much will the fight with Kanye West cost Adidas?

    TD Cowen: SVB’s fall does not threaten the stability of the banking system

    TD Cowen: SVB’s fall does not threaten the stability of the banking system

    Public investment in Ireland will be only for sustainable businesses

    Public investment in Ireland will be only for sustainable businesses

    Jerome Powell warns Fed could raise rates further

    Jerome Powell warns Fed could raise rates further

    JPMorgan: “zero-day” options contracts would sink SPX

    JPMorgan: “zero-day” options contracts would sink SPX

    Used cars prices rise unusually in the U.S

    Used cars prices rise unusually in the U.S

    Chinese mobile manufacturers want to go after Apple and Samsung

    Chinese mobile manufacturers want to go after Apple and Samsung

    ACS to build a battery plant for Panasonic in the U.S

    ACS to build a battery plant for Panasonic in the U.S

    Carvana could be on the verge of bankruptcy

    Carvana could be on the verge of bankruptcy

  • Markets
    Pontegadea continues to buy real estate: now the target is London

    Pontegadea continues to buy real estate: now the target is London

    BMW adds to profits thanks to Rolls Royce and Mini

    BMW adds to profits thanks to Rolls Royce and Mini

    Puma achieves record sales in last year with Gulden as CEO

    Puma achieves record sales in last year with Gulden as CEO

    Nike and Decathlon lead as the world’s largest sports retailers

    Nike and Decathlon lead as the world’s largest sports retailers

    Walmart unstoppable: sells U$S 611 billion in 2022

    Walmart unstoppable: sells U$S 611 billion in 2022

    Experts: recession to come at the end of rate hike cycle

    Experts: recession to come at the end of rate hike cycle

    Is it time to bet on tech stocks again?

    Is it time to bet on tech stocks again?

    Is it better to invest in Stellantis or in Ford and GM?

    Is it better to invest in Stellantis or in Ford and GM?

    U.S. housing market could continue to decline

    U.S. housing market could continue to decline

  • Investing
    Hedging hurts more than stock market declines, study says

    Hedging hurts more than stock market declines, study says

    How to manage risk in times of stock market volatility

    How to manage risk in times of stock market volatility

    Gold investment price

    Why a physical gold IRA is becoming a hot investing topic

    Home Depot announces dividend increase

    Home Depot announces dividend increase

    The fall in Alibaba’s earnings softens

    The fall in Alibaba’s earnings softens

    Is it better to invest in Stellantis or in Ford and GM?

    Is it better to invest in Stellantis or in Ford and GM?

    The biggest investment mistakes made by Warren Buffett

    The biggest investment mistakes made by Warren Buffett

    Which stocks are attractive for investing in IoT and robotics

    Which stocks are attractive for investing in IoT and robotics

    Mixed results for Uber Technologies in 2022

    Mixed results for Uber Technologies in 2022

  • Technology
    Why Americans want to remove Instagram from their phones

    Why Americans want to remove Instagram from their phones

    Tesla prepares a Model Y update: what we know about “Juniper”

    Tesla prepares a Model Y update: what we know about “Juniper”

    Li-Cycle to recycle lithium batteries in Rochester

    Li-Cycle to recycle lithium batteries in Rochester

    Is it time to bet on tech stocks again?

    Is it time to bet on tech stocks again?

    Amazon goes all-in on live sports streaming

    Amazon goes all-in on live sports streaming

    Bing’s AI has “lost its mind”

    Bing’s AI has “lost its mind”

    ChatGPT’s Chinese competitor to be launched in March

    ChatGPT’s Chinese competitor to be launched in March

    Alphabet board confesses doubts about Bard

    Alphabet board confesses doubts about Bard

    Advantages and disadvantages of AI, according to Bill Gates

    Advantages and disadvantages of AI, according to Bill Gates

  • CryptocurrenciesTRENDING
    Circle’s exposure to SVB is $3.3 billion

    Circle’s exposure to SVB is $3.3 billion

    Crypto crisis drives Silvergate into bankruptcy

    Crypto crisis drives Silvergate into bankruptcy

    Censorship resistance: what is it and why is it so important in the crypto industry?

    Censorship resistance: what is it and why is it so important in the crypto industry?

    Forbes claims Binance is in trouble, Zhao denies it

    Forbes claims Binance is in trouble, Zhao denies it

    SEC reportedly preparing a battle against stablecoins

    SEC reportedly preparing a battle against stablecoins

    U.S. regulatory pressure on cryptomarket increases

    U.S. regulatory pressure on cryptomarket increases

    What is Crypto Staking and why is the SEC regulating these services?

    What is Crypto Staking and why is the SEC regulating these services?

    Shanghai: a glimpse of Ethereum’s next update

    Shanghai: a glimpse of Ethereum’s next update

    Manchester City token collapses for this reason

    Manchester City token collapses for this reason

S&P 500 (USA) 
4.002.87  51.30  1.30%  
NASDAQ Composite (USA) 
11.860.11  184.57  1.58%  
Dow Jones (USA) 
32.560.60  316.02  0.98%  
FTSE 100 (United Kingdom) 
7.530.41  5.81  0.08%  
EURO STOXX 50 (Europe) 
4.185,62  4,02  0,00%  
Nikkei 225 
27.466.61  520.94  1.93%  
VIX 
22.00  2.15  8.90%  
Bitcoin (USD) 
28.213.10  684.93  2.49%  
Ethereum (USD) 
1.793.53  60.96  3.52%  
  • Home
  • News
    How much will the fight with Kanye West cost Adidas?

    How much will the fight with Kanye West cost Adidas?

    TD Cowen: SVB’s fall does not threaten the stability of the banking system

    TD Cowen: SVB’s fall does not threaten the stability of the banking system

    Public investment in Ireland will be only for sustainable businesses

    Public investment in Ireland will be only for sustainable businesses

    Jerome Powell warns Fed could raise rates further

    Jerome Powell warns Fed could raise rates further

    JPMorgan: “zero-day” options contracts would sink SPX

    JPMorgan: “zero-day” options contracts would sink SPX

    Used cars prices rise unusually in the U.S

    Used cars prices rise unusually in the U.S

    Chinese mobile manufacturers want to go after Apple and Samsung

    Chinese mobile manufacturers want to go after Apple and Samsung

    ACS to build a battery plant for Panasonic in the U.S

    ACS to build a battery plant for Panasonic in the U.S

    Carvana could be on the verge of bankruptcy

    Carvana could be on the verge of bankruptcy

  • Markets
    Pontegadea continues to buy real estate: now the target is London

    Pontegadea continues to buy real estate: now the target is London

    BMW adds to profits thanks to Rolls Royce and Mini

    BMW adds to profits thanks to Rolls Royce and Mini

    Puma achieves record sales in last year with Gulden as CEO

    Puma achieves record sales in last year with Gulden as CEO

    Nike and Decathlon lead as the world’s largest sports retailers

    Nike and Decathlon lead as the world’s largest sports retailers

    Walmart unstoppable: sells U$S 611 billion in 2022

    Walmart unstoppable: sells U$S 611 billion in 2022

    Experts: recession to come at the end of rate hike cycle

    Experts: recession to come at the end of rate hike cycle

    Is it time to bet on tech stocks again?

    Is it time to bet on tech stocks again?

    Is it better to invest in Stellantis or in Ford and GM?

    Is it better to invest in Stellantis or in Ford and GM?

    U.S. housing market could continue to decline

    U.S. housing market could continue to decline

  • Investing
    Hedging hurts more than stock market declines, study says

    Hedging hurts more than stock market declines, study says

    How to manage risk in times of stock market volatility

    How to manage risk in times of stock market volatility

    Gold investment price

    Why a physical gold IRA is becoming a hot investing topic

    Home Depot announces dividend increase

    Home Depot announces dividend increase

    The fall in Alibaba’s earnings softens

    The fall in Alibaba’s earnings softens

    Is it better to invest in Stellantis or in Ford and GM?

    Is it better to invest in Stellantis or in Ford and GM?

    The biggest investment mistakes made by Warren Buffett

    The biggest investment mistakes made by Warren Buffett

    Which stocks are attractive for investing in IoT and robotics

    Which stocks are attractive for investing in IoT and robotics

    Mixed results for Uber Technologies in 2022

    Mixed results for Uber Technologies in 2022

  • Technology
    Why Americans want to remove Instagram from their phones

    Why Americans want to remove Instagram from their phones

    Tesla prepares a Model Y update: what we know about “Juniper”

    Tesla prepares a Model Y update: what we know about “Juniper”

    Li-Cycle to recycle lithium batteries in Rochester

    Li-Cycle to recycle lithium batteries in Rochester

    Is it time to bet on tech stocks again?

    Is it time to bet on tech stocks again?

    Amazon goes all-in on live sports streaming

    Amazon goes all-in on live sports streaming

    Bing’s AI has “lost its mind”

    Bing’s AI has “lost its mind”

    ChatGPT’s Chinese competitor to be launched in March

    ChatGPT’s Chinese competitor to be launched in March

    Alphabet board confesses doubts about Bard

    Alphabet board confesses doubts about Bard

    Advantages and disadvantages of AI, according to Bill Gates

    Advantages and disadvantages of AI, according to Bill Gates

  • CryptocurrenciesTRENDING
    Circle’s exposure to SVB is $3.3 billion

    Circle’s exposure to SVB is $3.3 billion

    Crypto crisis drives Silvergate into bankruptcy

    Crypto crisis drives Silvergate into bankruptcy

    Censorship resistance: what is it and why is it so important in the crypto industry?

    Censorship resistance: what is it and why is it so important in the crypto industry?

    Forbes claims Binance is in trouble, Zhao denies it

    Forbes claims Binance is in trouble, Zhao denies it

    SEC reportedly preparing a battle against stablecoins

    SEC reportedly preparing a battle against stablecoins

    U.S. regulatory pressure on cryptomarket increases

    U.S. regulatory pressure on cryptomarket increases

    What is Crypto Staking and why is the SEC regulating these services?

    What is Crypto Staking and why is the SEC regulating these services?

    Shanghai: a glimpse of Ethereum’s next update

    Shanghai: a glimpse of Ethereum’s next update

    Manchester City token collapses for this reason

    Manchester City token collapses for this reason

INVESTOR TIMES
Home Featured

Dangers and opportunities in growth stocks

The financial market crash continues to wreak havoc on the fortunes of major investors. Is it possible to find gems amidst the disaster?

Alejandro Gil by Alejandro Gil
11/22/2022 - 10:42
in Featured, News
Reading Time: 3 mins read
Share on FacebookShare on TwitterShare on LinkedIn
  • Inflation and monetary policies to curb it resulted in a sharp blow to risky financial assets.
  • Stocks are in the midst of poor performance and have seen little respite in 2022.
  • However, some analysts believe that in the midst of the storm, worthwhile options can be found.

The macroeconomic situation in the United States emptied the portfolios of hundreds of large and small investors. Recession fears become the main driver in people’s loss of interest in growth stocks. Analysts recommend investing in defensive stocks rather than aiming for a high rate of return.

However, there are other experts who believe that “amidst the rubble” it is possible to find gems among these types of assets. The popular Growth Stocks shone during the pandemic and their numbers rose by hundreds of percentage points, bringing staggering gains to investors. But with the end of the “easy money” era, they went from being the most attractive stocks to the most feared in the world of finance.

This asset class is now in the depths and many of them could become a good investment thanks to their low prices. But not all low prices can be interpreted as an investment opportunity. This is precisely what the TipRanks portal is referring to when it points out that many companies in the technology sector have been punished and are unlikely to recover.

Investors view growth stocks with trepidation

Growth stocks have become the assets investors are most wary of in these turbulent times. The downward pressure many of them received was such that investors suspect they are in a situation similar to the tech bubble of 2000. The fact that tech investments are being compared to the “.com” bubble is bad enough.

“Some high-growth stocks are facing a situation similar to the tech bubble of 2000.”

“Truth be told, there are quite a few similarities, with the most striking being the crazy valuations of tech stocks that have now almost completely evaporated,” explains the aforementioned portal. They add that most of these cases are outside the sphere of the so-called Big-Tech. Even though the Federal Reserve’s regression measures hit the big ones hard, some of them are still holding on to expected losses.

These estimated losses correspond to what normally happens in a bear market at the gates of a recession. Meanwhile, a large number of companies experienced losses greater than those that would normally be generated by a situation such as the current one. It is precisely in the latter that one cannot have full confidence due to the fact that their share prices are very cheap.

As far as the shares of the technology giants are concerned, not all bargains are guaranteed successes for investors. For example, companies such as the mighty Meta find themselves in an unusual situation in which they are threatened from all sides. In that sense, Mark Zuckerberg’s firm is facing a crisis of originality in which it cannot find a way to attract younger users.

At the same time, its bet on the metaverse is costing it billions of dollars and the flight of investors as a consequence. As can be seen, growth stocks are mired in a huge whirlpool in which it is extremely complex to pick up the gems.

The bubble situation among fast-growth stocks

With this in perspective, it follows that large company stocks are far from resembling a bubble. Meanwhile, the further down one goes and analyzes small-cap, fast-growing companies, the bubble elements become more distinct. Below are some of the examples of this second type of companies.

  • Peloton: growth was 725% from its low point in March 2020 to December 2021. Since then it has been losing 95% of its value and is trading even below its pre-growth level.
  • Zoom: the winner of the pandemic, which grew by 780% until its peak in October 2021. Since then it fell by more than 85%.
  • Carvana: this firm grew by a staggering 1049% from March 2020 to August 2021. From there it plummeted by 97% destroying all the gains it generated during and even before the rally.
  • Fiverr: another of the jewels of the pandemic, which grew by 1,126% until its peak reached in February 2021. It then began a collapse that totals 91% of its value and its shares are at the same level as before the pandemic.

These are just a few of the many examples that can be found in high growth stocks. While most of these companies may recover ground in the long run, it is certain that others will not be able to do so.

This is because the declines have been of such magnitude that they would make even cryptocurrency market investors pale.

Easy money conditions were the main driver for many businesses during the pandemic
During the worst part of the pandemic, the lockups, many companies’ stocks experienced a big boost from remote work. But as the confinement era ended, interest in them waned, leading to frightening drops in their stock prices. Image credit: Gb-advisors.com

Expectations are focused on the long term

One aspect to note is that most of these companies are not so-called meme stocks whose rise is due to fortuitous events. On the contrary, these companies have solid business schemes and have revenues from sales of services that people actually need and buy. In addition, the companies’ management is doing an outstanding job of cutting costs to stay profitable.

However, market conditions are turning them into penny stocks. Either way, these are companies within the range of long-term growth potential. That means that these companies are currently unprofitable, but have the potential to deliver high returns to investors thanks to their ability to develop their products and services in the future.

The business models correspond to innovation and other characteristics that could make them indispensable in the future. The easy money made many of these companies stay in a “vegetation zone” and their models became entrenched in an artificial reality created by the Fed during the confinements. When the latter ended, high interest rates became the great tormentors.

In the midst of this context, the best-performing companies will have the ability to deliver high returns when the Fed takes its foot off the accelerator. For now, investors will have to tread carefully and avoid falling into the trap of the tempting low prices of growth stocks. In other words, the low prices are with respect to artificial spikes and not with respect to natural upside that might occur in normal times.

Tags: Financial marketssharesStock exchangeWall Street

Related articles

How much will the fight with Kanye West cost Adidas?
News

How much will the fight with Kanye West cost Adidas?

by Pablo Petovel
— March 16, 2023
TD Cowen: SVB’s fall does not threaten the stability of the banking system
News

TD Cowen: SVB’s fall does not threaten the stability of the banking system

by Alejandro Gil
— March 15, 2023
Public investment in Ireland will be only for sustainable businesses
News

Public investment in Ireland will be only for sustainable businesses

by Pablo Petovel
— March 13, 2023
Jerome Powell warns Fed could raise rates further
News

Jerome Powell warns Fed could raise rates further

by Pablo Petovel
— March 13, 2023
JPMorgan: “zero-day” options contracts would sink SPX
News

JPMorgan: “zero-day” options contracts would sink SPX

by Alejandro Gil
— March 13, 2023

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Last published articles

How much will the fight with Kanye West cost Adidas?
News

How much will the fight with Kanye West cost Adidas?

by Pablo Petovel
— March 16, 2023
Pontegadea continues to buy real estate: now the target is London

Pontegadea continues to buy real estate: now the target is London

by Pablo Petovel
  March 16, 2023

BMW adds to profits thanks to Rolls Royce and Mini

BMW adds to profits thanks to Rolls Royce and Mini

by Pablo Petovel
  March 15, 2023

TD Cowen: SVB’s fall does not threaten the stability of the banking system

TD Cowen: SVB’s fall does not threaten the stability of the banking system

by Alejandro Gil
  March 15, 2023

Hedging hurts more than stock market declines, study says

Hedging hurts more than stock market declines, study says

by Alejandro Gil
  March 15, 2023

Facebook Twitter LinkedIn Telegram RSS

ABOUT INVESTOR TIMES

INVESTOR TIMES is an independent publication of economic, finance and investment content, owned and operated by Altas Ventures.

MORE ABOUT US

  • Our team
  • Work with us
  • Advertise on IT
  • Contact
  • Corporate information
  • Terms of Use
  • Cookies Policy
  • Privacy Policy

INTERNATIONAL EDITIONS

Investor Times in English

Investor Times en Français

Investor Times in Deutsch

Investor Times in Italiano

Investor Times em Português

Investor Times po Polsku

Investor Times на русском языке

El País Financiero (edición en Español)

© ATLAS VENTURES SLU, all rights reserved. Any information contained in INVESTOR TIMES is for educational and/or informational purposes only, it is not financial and/or investment advice. INVESTOR TIMES may obtain economic retribution by recommending services or products of third parties. INVESTOR TIMES does not accept, nor will it accept in the future, subsidies or funds from Governments, political parties or public institutions.

No Result
View All Result
  • Home
  • News
  • Markets
  • Investing
  • Cryptocurrencies
  • Technology

  •  EXCLUSIVE  3 Russian men are the real perpetrators behind Juicy Fields, says Glanse

     NEW  Compound Interest Calculator

     TRENDING 
    Investing in Bitcoin Investing in the Metaverse 5 reasons to invest in Amazon

© ATLAS VENTURES, all rights reserved.