Despite all the blood, I see a bull case for Tech and the USA. In the last 5 years:
1- The Nasdaq has gained 99.77% until it's peak. It has corrected by 17.41% since the peak. Total gains till today: 64.9%.
2- The Dow Jones has gained 65% till the peak. Corrected by 21.71% since then. Total gains till today: 35.85%.
3- CAC 40 has gained 20% in the last 5 years till the peak. Corrected by 22.12% in this sell-off. Total returns are -6%.
My thoughts:
- Tech used to go up more and down more. Now it went up more and down less. This is likely to encourage and push traditional investors to invest more in tech. They were afraid from tech because of the bloody downturns. Now tech holds better in a downturn, so that argument is no longer there.
- Europe is likely to be hit harder from this crisis since they rely a lot on Tourism. That means a harder recession. Europe tech sector is weak and unlikely to match its American counterpart growth in a EU slowdown.
- China might be the biggest loser in this. The world might realize we are depending too much on China. The US government might force company to build locally or outsource to friendlier countries they want to boost. China is not going to the dark ages but might face a slow down; though a social revolution is definitely not out of the question.
- The oil crisis, if prolonged, is going to change some countries. Look at Venezuela. Russia, Middle East, Algeria, Canada, etc... These countries might face budget challenges they have never been through before if oil goes below $20 for an extended time.
- The US tech sector being the only good-yield field and becoming a safe haven for investment in a world of worry and chaos will boom into a bubble of untold proportions.
Disclaimer: Not a professional advice. Might lose part of your money or all of your capital. Might be a total hopium from someone is the tech sector seeing lots of red today.
Except that in practice nobody says that. I've worked with both large financial institutions and tiny hedge funds going back nearly 30 years, traders are cognitive bias on legs. There's a reason Wall Street has a statue of a giant bull but not of a bear.
The entire pipeline isn't in China. Taiwan seems to hold some of it and they're doing just fine. They've apparently managed to contain the virus quite well.
1- The Nasdaq has gained 99.77% until it's peak. It has corrected by 17.41% since the peak. Total gains till today: 64.9%.
2- The Dow Jones has gained 65% till the peak. Corrected by 21.71% since then. Total gains till today: 35.85%.
3- CAC 40 has gained 20% in the last 5 years till the peak. Corrected by 22.12% in this sell-off. Total returns are -6%.
My thoughts:
- Tech used to go up more and down more. Now it went up more and down less. This is likely to encourage and push traditional investors to invest more in tech. They were afraid from tech because of the bloody downturns. Now tech holds better in a downturn, so that argument is no longer there.
- Europe is likely to be hit harder from this crisis since they rely a lot on Tourism. That means a harder recession. Europe tech sector is weak and unlikely to match its American counterpart growth in a EU slowdown.
- China might be the biggest loser in this. The world might realize we are depending too much on China. The US government might force company to build locally or outsource to friendlier countries they want to boost. China is not going to the dark ages but might face a slow down; though a social revolution is definitely not out of the question.
- The oil crisis, if prolonged, is going to change some countries. Look at Venezuela. Russia, Middle East, Algeria, Canada, etc... These countries might face budget challenges they have never been through before if oil goes below $20 for an extended time.
- The US tech sector being the only good-yield field and becoming a safe haven for investment in a world of worry and chaos will boom into a bubble of untold proportions.
Disclaimer: Not a professional advice. Might lose part of your money or all of your capital. Might be a total hopium from someone is the tech sector seeing lots of red today.