Good post.
I have occasionally disagreed with your specific methods, and certain conclusions of yours, but the general method you outline in that post, I agree with 100%.
You may very well be right, that this downturn ends up being worse than a "garden-variety" recession.
In the recent panic selling, I considered loading up on Quality nontech Value stocks. There is a large body of opinion, with a lot of historical evidence to back it up, that the leaders in each successive Bull Market are different. Different industries, and often different companies within industries. Leaving aside the discussion of whether the Bull is Back, I made the decision (which looks good so far) that tech in general would lead the market higher, that's where the (potential future) growth in profits still is.
Within tech, though, there is going to be a certain "winnowing out", IMO. I am not holding MSFT or INTC or CSCO, for instance. MSFT, because I liked the valuation (at the bottom) of others better, and they are being affected by the LawOfLargeNumbers. INTC, because I think growth in chips has permanently shifted away from their core business, (and that Law is affecting them, too). CSCO, because I think their business will turn last (in spite of what they said recently), and their valuation is still too high. |
