Along with the bleating of the crypto crowd that the current collapse is all a conspiracy – which tells you a lot about the psychology of people who take crypto seriously is the whinging of fundamental advisor types who are apparently telling their clients don’t worry the market always goes up. Apparently, they cannot differentiate between the market that is the Dow as a carefully crafted exercise in survivor bias, and individual stocks. Indices do always go up over time because of the continuous recycling of stocks that occur within them. This is fine if you own the index ETF and can tolerate the current drawdown – it does you no good if you have been lumoed into a bunch of stocks that have taken a hammering.
Implicit within this piece of idiocy is the inability to understand that if your stock goes down by 25% making 25% on your remaining capital doesn’t get you back to where you started from. You need a 33% gain. With this in mind, I took all those stocks within the NASDAQ 100 that are currently in drawdown and looked at the percentage gain required from the current share price to get back to the previous 52 week high. Note the last 52 week high and all time high are not always the same.
Whilst, not one for making predictions I don’t think the chances of ZM (Zoom) going up four fold are very high. If you are holding ZM and a basket of other tech darlings that were purchased at their highs – I think the technical expression is that you are stuffed.