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Tech Selloff Will Likely Continue

Sep. 03, 2020 3:50 PM ETPTON, SHOP, TSLA, ZM
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Matthew Zeets's Blog
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Value, Growth, Growth At A Reasonable Price

Seeking Alpha Analyst Since 2015

I was taught the value of investing and the power of compounding money at a young age by my dad and aunt. My dad helped me start a CD when I was about 10 to get better returns off my Christmas and birthday money. I started investing in the stock market when I was in grad school for Computer Science in 2008/2009. Stocks had dropped so far, it seemed like too good of a buying opportunity to me to pass up. I hardly knew anything about individual stocks, but luckily my timing was good and I saw multi-bagger returns on almost all my stock picks over the next few years. I've been interested in the stock market ever since and have done research on Seeking Alpha the last 5 years, as well as taking a couple online business/finance courses.

A farting horse will never tire; a farting man is a man to hire.


  • There was a steep selloff in technology and all around "future" stocks.
  • I expect this selloff will continue.
  • These were mostly momentum trades and there will be plenty of people not wanting to be left holding the bag when they sell off.

Some stocks, those that benefited from sheltering in place and technology in particular, have seen historic runs higher. In the case of Tesla (TSLA), Shopify (SHOP), Zoom (ZM), and Peloton (PTON), the runs have accounted for 150%-450% gains just since the start of the year (and even higher if looking from their March lows).

Data by YCharts

I assume a lot of tech stocks will fall in the next few days/weeks/months, but these 4 in particular got well out ahead of their prospects in my opinion. They are all priced as if everything will go perfectly over the next 5-10 years. With a sell off starting Monday for Tesla after the stock split and intensifying the last couple days until it spread to the rest of tech. I expect this will trigger some stop losses, which will trigger others to also want to sell before the stocks crater back down to normal valuations. This seems like the most reasonable scenario to me for stocks that have not been tied to fundamentals in several months, but really off being poster children for the stay-at-home era and momentum trades. Sell now while you have a chance.

For TipRanks: Sell- TSLA, SHOP, ZM, PTON

Analyst's Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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