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Tech correction

Stocks and Shares ISA , Choosing funds for ISA's, risk factors for funds etc
Investment strategy discussions not dealt with elsewhere.
Steveam
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Re: Tech correction

#410968

Postby Steveam » May 11th, 2021, 9:36 am

Buy when there’s blood on the streets. I might log on later and spend a few pennies.

Best wishes,

Steve

ADrunkenMarcus
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Re: Tech correction

#410998

Postby ADrunkenMarcus » May 11th, 2021, 11:34 am

I get really horny on days like these!

And the stronger £ will mean we can buy more USA securities for our currency.

Best wishes


Mark.

simoan
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Re: Tech correction

#411003

Postby simoan » May 11th, 2021, 12:01 pm

Steveam wrote:Buy when there’s blood on the streets. I might log on later and spend a few pennies.

Best wishes,

Steve

It's hardly blood on the streets, is it? Just a bull market climbing a wall of worry. IMHO there will be more days like this in the next few months and so there's no rush, even when you're 30% cash as I am currently. Surely this is just the old "Sell in May..." kicking into action :) although concerns about future inflation do have some merit.

All the best, Si

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Re: Tech correction

#411006

Postby Spet0789 » May 11th, 2021, 12:25 pm

frunk wrote:Darn, I bought the SMT cool aid close to its ATH. Nursing a sizeable 4 figure loss now, the decision is to sell and take the hit or ride it out. Looks like the stock has some support around 950, but it could just as easily go lower. I think I need to stick with it, but I think I am in for the long term now a few years at least. Stock recovered a little to 970, so maybe we are at the bottom of the rout?


Not really meaningful to consider 'support' at any level on an IT. Ultimately it will trade broadly in line with the NAV of the underlyings (+/- 10% or so). If you believe in technical analysis you really need to look at where the support is for the various portfolio constituents.

simoan
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Re: Tech correction

#411009

Postby simoan » May 11th, 2021, 12:35 pm

Spet0789 wrote:
frunk wrote:Darn, I bought the SMT cool aid close to its ATH. Nursing a sizeable 4 figure loss now, the decision is to sell and take the hit or ride it out. Looks like the stock has some support around 950, but it could just as easily go lower. I think I need to stick with it, but I think I am in for the long term now a few years at least. Stock recovered a little to 970, so maybe we are at the bottom of the rout?


Not really meaningful to consider 'support' at any level on an IT. Ultimately it will trade broadly in line with the NAV of the underlyings (+/- 10% or so). If you believe in technical analysis you really need to look at where the support is for the various portfolio constituents.

I would just look at where the NASDAQ was before Covid hit. If you think it could go back to sub 10,000, and what that might mean for any technology funds, then there is no need to overanalyse things IMHO. That would be blood on the streets!

All the best, SI

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Re: Tech correction

#411011

Postby 77ss » May 11th, 2021, 12:45 pm

simoan wrote:
Steveam wrote:Buy when there’s blood on the streets. I might log on later and spend a few pennies.

Best wishes,

Steve

It's hardly blood on the streets, is it? Just a bull market climbing a wall of worry. IMHO there will be more days like this in the next few months and so there's no rush, even when you're 30% cash as I am currently. Surely this is just the old "Sell in May..." kicking into action :) although concerns about future inflation do have some merit.

All the best, Si


Exactly. A bit of perspective needed.

Different portfolios will give different numbers, but my own experience is one of a 31% capital drop back in the 14/02/20 - 20/03/20 period.

By comparison my drop so far this week is 3.4%.

I took no specific action in the earlier period and by 20/3/21 my capital value had completely recovered.

TahiPanasDua
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Re: Tech correction

#411028

Postby TahiPanasDua » May 11th, 2021, 1:17 pm

Observing the current tech falls reinforces my personal strategies which are:

1. There is no right or wrong time to invest except with hindsight. Investment should be spread over time to reflect this fact.

2.There is such a huge variation in the goals of investors that timing the market and assessing the result is almost a personal issue so be wary of what others do.

3. History suggests conscious market timing is a hazardous task with generally poor outcomes for most.

However, out of desperation I felt forced to make high risk bets on the market to recoup big losses occasioned by the Asian Crisis. Fortunately it worked well but I could not take such chances ever again.

For what it is worth, I adopted the following tactic which resulted in extremely long waits between moves. It took ten years and only a couple of moves. Few investors could put up with the wait or the risk.

a. Avoid the temptations of FOMO and ignore all market moves except the most extreme. Be sure that current data suggests a possible historic event. They occur roughly every 7 to ten years.

b. Don't project into the future any current trend. Only use current fact.

c. Go in hard when you think the time is "now".

Of course the above is easy to say but hard to do. I was probably just lucky.

Using the above tactic, the current fall in tech stocks would have left me unmoved.

TP2.

GeoffF100
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Re: Tech correction

#411152

Postby GeoffF100 » May 11th, 2021, 6:54 pm

simoan wrote:It's hardly blood on the streets, is it? Just a bull market climbing a wall of worry. IMHO there will be more days like this in the next few months and so there's no rush, even when you're 30% cash as I am currently. Surely this is just the old "Sell in May..." kicking into action :) although concerns about future inflation do have some merit.

Yes, the uptrend may continue after a small pull back, or we may be moving into a down trend. Either way, nothing much has happened. Vanguard Developed World VEVE was at an all time high of 62.68 on 16 April. The closing price today was 60.80, a fall of almost exactly 3%. Nothing to get excited about so far.

LooseCannon101
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Re: Tech correction

#411184

Postby LooseCannon101 » May 11th, 2021, 9:18 pm

The developed world seems to be recovering from the shock of Covid. I expect the rest of the world will eventually catch up.

Why do people supposedly invest for the long term, but get worried by the short term? Nothing has fundamentally changed since last week - just the mood on Wall Street that inflation might rise.

Company valuations always fluctuate - as J.P. Morgan used to say. The cheaper the stock, the higher it's long term returns - so long as the business is growing and it has the ability to raise prices. When technology companies stop growing or lose market share, that is the time to worry.

A highly diversified world equity portfolio makes tech. corrections and/or commodity booms easier on one's nerves.

Steveam
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Re: Tech correction

#411208

Postby Steveam » May 11th, 2021, 11:19 pm

Volatility is an opportunity to take advantage of the irrationality market participants. One of the reasons I avoid the LTBH or HYP or Passive labelling (and there are many others) is because I don’t believe process or strategy or whatever one calls it should be a substitute for thought and action (or inaction). Although I see myself as a lazy, long term investor I occasionally see fluctuations which tempt me.

I held SMT for quite awhile. I top sliced and eventually sold thinking I might buy back (but not worried if I didn’t). There was a bit of a wobble a couple of months ago so I bought some but they bounced over the next day or so and I sold again to pocket a modest profit by “day trading” - this is at the extremes for me. Today’s wobble is, probably, just that and I’ve bought a few which I’ll either keep or not - no concern either way really.

Each year I make a few thousand by taking advantage of these fluctuations. Another recent example is Unilever.

When I see a share like SMT at 25% off it’s recent highs I might take a (smallish) punt.

Just to be clear. What I’m talking about is a small part of a much larger set of holdings and I don’t bother to check whether I’d have been better off doing otherwise. BTW, I invested through high inflation, the tech bubble, the gfc, and COVID.

Best wishes,

Steve

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Re: Tech correction

#411260

Postby Urbandreamer » May 12th, 2021, 8:46 am

I'm not sure that I can be as calm and collected as some other posters. However I can fake it and act as if I am.

I invested money on Monday and expect to do the same next month. What I invest in changes over time, but slowly.

I sell when the writing's on the wall, or I lose faith in the managment. I don't believe that to be the case with current Tech stocks, though returns may not be as high as some predicted.

Hence I'm not joining the rush for the exit. I'll keep my SMT and consider over the next few months or year if I want more.

I too have seen real crashes in the last 30 years. As yet this is simply a correction.

GeoffF100
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Re: Tech correction

#411297

Postby GeoffF100 » May 12th, 2021, 11:04 am

Urbandreamer wrote:I too have seen real crashes in the last 30 years. As yet this is simply a correction.

It is a long way from being a correction for the market as a whole. VWRL is currently (11:02) down less than 2.5% from its all time high. A "correction" is a fall of 10% or more. We are a long way from that.

NotSure
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Re: Tech correction

#411357

Postby NotSure » May 12th, 2021, 1:26 pm

GeoffF100 wrote:
Urbandreamer wrote:I too have seen real crashes in the last 30 years. As yet this is simply a correction.

It is a long way from being a correction for the market as a whole. VWRL is currently (11:02) down less than 2.5% from its all time high. A "correction" is a fall of 10% or more. We are a long way from that.


Regarding tech, the Nasdaq is less than 6% off its ATH. But certain stocks and funds, e.g. Tesla (-30%) and SMT (-20%), have 'officially corrected'. However both are way ahead over the last year.

NotSure
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Re: Tech correction

#411361

Postby NotSure » May 12th, 2021, 1:35 pm

Just saw from USA

BREAKING 12-month increase in CPI climbs to 13-year high of 4.2% from 2.6%


I guess a jump was expected due to last year's Covid dip falling out the rolling 12-month figures. But justifying $120B/mo asset purchases against that back drop may be a bit trickier....

Edit: followed by

BREAKING Yearly advance in core CPI rises to 26-year high of 3% from 1.6%

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Re: Tech correction

#411436

Postby Adamski » May 12th, 2021, 5:28 pm

I think the tech correction has further to go. Inflation in the US has increased from 2.6% in March to 4.2% in April, above consensus forecasts of 3.6%.

The problem for tech companies is that their valuations are based on future profit forecasts, not on current profits, as many of the nasdaq companies are barely profitable (Tesla) or loss making (Uber). I believe Wall Street values many of these companies on the present value of its discounted cash flows.

So that any increase in discount rate used, dramatically decreases their calculated market value. Hence the correction and may be further to go if this latest inflation figure is a surprise.

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Re: Tech correction

#411463

Postby ADrunkenMarcus » May 12th, 2021, 7:46 pm

Adamski wrote:I think the tech correction has further to go. Inflation in the US has increased from 2.6% in March to 4.2% in April, above consensus forecasts of 3.6%.


It's nice to be a MasterCard and PayPal shareholder, because they have inflation protection to some degree. If prices rise, payments on their networks rise too and they take their cut.

Best wishes


Mark.

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Re: Tech correction

#443798

Postby Adamski » September 20th, 2021, 11:26 am

China correction continuing today. BG China Growth down 7.1% today, Pacific Horizon down 4.5% today due to growth fears. Steel output slump not a good sign for global growth. However guess this could/may be a good time to get into China as will eventually overtake the US economy, estimate 2028 be the world's largest economy, and stockmarket valuations will eventually reflect that.

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Re: Tech correction

#443802

Postby ADrunkenMarcus » September 20th, 2021, 11:45 am

This plays out in other sectors, too.

I noted Kone's weakness this morning (down about 3%) and I suspect part of it is because of signs of weakness in the Chinese construction sector as well as the tech crackdown by the government. Kone has put a lot of effort into significantly increasing their market share in China over the prior decade. However, I think their business remains defensive in many ways and they have recurring revenues from their existing installed elevator and machinery base, even if new equipment may be weak for a period.

Best wishes


Mark.

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Re: Tech correction

#443823

Postby vagrantbrain » September 20th, 2021, 1:09 pm

Hoping it continues till I get paid on Friday and can top-up at slightly less stratospheric prices than recently

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Re: Tech correction

#444236

Postby Quint » September 21st, 2021, 6:54 pm

Adamski wrote:China correction continuing today. BG China Growth down 7.1% today, Pacific Horizon down 4.5% today due to growth fears. Steel output slump not a good sign for global growth. However guess this could/may be a good time to get into China as will eventually overtake the US economy, estimate 2028 be the world's largest economy, and stockmarket valuations will eventually reflect that.


Interesting article by Stephen Yiu (Blue Whale Growth) where he believes China has now become uninvestable due to the unpredictable actions of the government. I sold my only China Trust a while ago and have outsourced this decision to my global managers who are better placed to make a call on this.

Can't link the article as I can't remember where it was, may have been the Telegraph.


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