Well, you have to pay good attention to the people and what they are demanding. For example, the semiconductor shortage that we have is now going on very poorly and this will be not solved in a matter of minutes or months.
Paul Meeks Won’t Put New Money to Work in Apple and Other FAANG Names
WallStreet is making the mistake of not taking it as seriously as it should. This is all according to one particular investor named Paul Meeks. We know that this guy knows his stuff so we are paying attention to what he has to say about the matter and you should too.
“This is a problem that might be that kind of problem that persists deep into 2023,” he said to the news on Friday. He is the Independent Solutions Wealth Management portfolio manager. As we said, he knows his stuff and what he is talking about.
“Some of these companies actually will not be able to ship units. And if they can’t ship units, they might disappoint on their earnings,” he said. “Their stocks are so expensive that they could go down. Not go down a bit, they could go down a lot.”
A lot of companies and people are already struggling with the supply Shortage now. It is only going to get worse in the future and Wall street is not paying enough attention to this.
“I also like semiconductor capital equipment,” he said in a statement of the news. “But you have to be a sharpshooter because not only do you have to judge if their products are in favor or out of favor… you also have to figure out who has best executed their supply chains.”
Firstly, technology stocks are notorious for having higher valuation multiples than the rest of the market. Investors are selling high-multiple technology stocks because they fear the company’s future earnings and cash flow won’t justify the stock’s price.
It is “still too early to call the bottom in tech,” Meeks added. “That’s neat if you’re planning on being a tech investor for the foreseeable future. Nonetheless, I would approach it methodically, perhaps in four or five instalments spread out over time.
In addition, I believe we are approaching a new period in which it will be more important to invest in innovative companies with high valuations than it was in the past to invest in some of the heroes of the past, when valuations were less of a concern.”
As a result, the cost of capital for many struggling technology firms increases in a rising interest rate environment. As a result, losses can quickly escalate, having a negative effect on stock values.
The current technological train wreck can be attributed to all of these factors.
Over the past three months, the Nasdaq Composite has lost over a third of its value from its record closing high in November, including a loss of 9.9 percent over the past month.
This is all that we know for now.