05-11-2021, 08:45 AM
I don't think we've seen anything yet regarding price drops in high flyers. Many of the high growth stocks are still in the stratosphere as far as valuation goes, and many were run up on playing the out of the money call option game, so there isn't really much solid fundamental support below them.
Stocks like those in streaming, the genomic sector, cloud computing, software, etc. are still trading at 20-30X revenues with no earnings. Keep in mind the massive leverage in the system as well. IIRC margin use is at an all-time high.
You get a fund or two (ARKK maybe) blow like Archegos did a month ago and it's all going to come crashing down hard.
Another day or two sell-off and Friday could get awfully interesting when margin calls go out.
Stocks like those in streaming, the genomic sector, cloud computing, software, etc. are still trading at 20-30X revenues with no earnings. Keep in mind the massive leverage in the system as well. IIRC margin use is at an all-time high.
You get a fund or two (ARKK maybe) blow like Archegos did a month ago and it's all going to come crashing down hard.
Another day or two sell-off and Friday could get awfully interesting when margin calls go out.