The major US index, the S&P 500, is down only about 16.8% from peak. Why then does it look that there has been a carnage in the US market? Why do all those who bought US or global funds/ ETFs and enthusiastically opened Robinhood trading accounts looking morose these days? Why does the pain look so much worse than what's captured in the headline index?
One, the average S&P stock is down 24% - not evident from the index which is calculated on a market cap weighted basis.
More than two-thirds of the stocks in the S&P 500 index have fallen more than the index.
Two, the stocks that everyone invested in so enthusiastically in 2021 through Robinhood accounts, tech funds and what have you are down even more.
The NASDAQ index itself just had its worst month since the 2008-09 crisis and is in a 26% drawdown.
The leading FANMAG/ FAANGM (Facebook/Meta, Apple, Netflix, Microsoft, Amazon, Google/Alphabet) stocks that appeared 'forever' bets to many last year are down 17-75%, with 3 of them: Amazon, Meta and Netflix down over 40%.
That's what makes the pain and losses so real to many!
Others in the tech space, including erstwhile favorites like DocuSign and Peleton, are down 70-90%. The Robinhood stock is itself down a full 88%.
Many 'hot' themes that were enthusiastically pursued in the last year or two, with many thrilled at their trading prowess in the US markets, have come crashing to the ground.
The Work From Home ETF (WFH) which was launched at the onset of the COVID-19 pandemic has lost 37% from its peak.
The Renaissance IPO ETF, which tracks the largest, most liquid, newly-listed U.S. IPOs has tanked 63% from its peak in Feb 2021 and 50% YTD. This includes the likes of Uber, AirbnB, Zoom, Doordash and Lyft.
Cathie Woods of ARK has been the high priestess of pushing high tech, innovation et al as the ultimate investing theme. Her flagship fund is down 74%, in spite of Tesla providing a big cushion.
Online Retail ETFs such as ONLN and IBUY are down more than 65% while Online Payment & Fintech ETFs such as IPAY and FINX are down 40 to 50% from their 52-week highs.
Cloud computing is down 56%, Blockchain equities lost 60% while Social Media stocks (SOCL ETF) have lost 56% from their peak.
The other much marketed theme? It was China/ Greater China. Those ETFs are down 43-47%, with the China tech themed ones down ~ 65%.
The largest Greater China Equity Off-shore Fund in India is down 43% from its Feb peak. Plus it charges you 2.38% expense ratio and 1% exit load if exited within 12 months.
In short, many of the much hyped and 'storified' themes that were pushed as perennial ones have crashed much more than the headline indexes.
These were also themes that attracted the newbies who were excited about the easy money.
Remember the many NASDAQ funds & ETF launches in India last year, not to mention those on the China/ Greater China theme? The enthusiastic launches even in the Indian market?
No theme works forever!
Data shows that thematic funds usually come towards the end of the bull run for that particular theme because that is when the retail investors are enthused about it and when it's an easy sell.
Thematic fund schemes are great for gathering assets for the fund house but have generally poor outcomes for the investors. More on that another time.
From the desk of Devina Mehra
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Economists Think Dollar's Fall May Explain the Recent ‘Rally’ by Steve Liesman
Einstein taught us about relativity in nature. Now come Devina Mehra and Shankar Sharma of First Global to teach us about relativity in financial markets -- and raise some serious questions about just what is driving stock prices.
First Global reports are quite credible and, on occasion, more than that.
What prompts this mention is Intel's earnings report and the fact that First Global has had a pretty good bead on the company and its stock.
AMD up again following First Global upgrade to ‘buy’ (AMD) By Tomi Kilgore
Analyst Kuldeep Koul at First Global upgraded Advanced Micro Devices (AMD) to "buy" from "outperform," given the "exceptional traction" that the chipmaker's Opteron line of processors has been able to get.
Baidu Climbs on First Global’s ‘Outperform’ Outlook
Baidu Inc., the operator of China’s most-used Internet search engine, rose to the highest price in two weeks after First Global rated the shares “outperform? in new coverage.
Personality counts: Walmart's frugal, but Target charms
"It's better to take a slight hit on [profit] margins and keep on moving and inventing," says First Global Securities. And at least for now, Target is inventing in a way that appeals to consumers with money to spend.
Dead Batteries
At 11 times trailing earnings, Energizer is cheaper; Gillette's multiple is 25. But cheaper doesn't mean better, says First Global.
Bipinchandra Dugam @bipinchandra90
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invested in both GFF-GTS and Super I50. Thank you very much for such wonderful investing experience with completely new approach. In my 15years of investing first product I felt which close to what customer want.
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by far you are the best, I have not come across transparency, acumen, global expertise, exposure, protection of capital, delivering return from any fund/ fund managers. Invested very small size in 3 products will keep on increasing it over the period
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@KarmathNaveen the person with whom I always interact
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Very happy & relaxed to be invested with first global pms
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With so much of volatility in the market, risk management is very important part & considering that FG is doing awesome work!!! Kudos to you Chief
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We can load above testimonials on site as a scroller, and just below that we can add a section for compliments . Below tweets are comments and praises are related to our content, performance and some our direct compliments to you.
ADIT PATEL @ADITPAT11226924
Good team...
Special mention @KarmathNaveen .. he is soo helpful anytime of the day or night..
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Bought Peace with FG-Hum.Moving all funds from DIY investing to well managed and diversified PF at low cost.
It has doubled almost, excellent pick.Every small investor must invest in her FG-HUM Smallcase.
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I have 8 small cases and your has been the most rewarding ones .. thank you Devina.
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There is absolutely no doubt that she is one of the best investors of India in modern times but more importantly, she shares the most sincere and sane advice with retail investors.
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Wow Superb Returns🔥 Congratulations Chief for being Number 1 among all PMS!!!
You are one of the sharpest mind in Global Stock Market
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Congratulations Devina, results talk in itself!
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We are learning More about markets (& Life ) thanks to U than we learnt in our Professional courses.A BIg Thank You, Wish all get Teachers Like You!!
Sumit Sharma @MediaSumit
"The ability to be comfortable with being outside consensus is a superpower in investing...and in life." Devina ji hits the nail on its head!
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Congratulations @devinamehra mam! All the best for long term returns as well.
Vinay Kumar @VinayKu05949123
This is the wonderful session I have ever attended till date. One of the most fruitful hour of my life. Devina madam, ur clarity on financial mkts is simply superb.The way u portray the facts supported by "data" about stock mkts is really astonishing.I will listen again.Thanks.
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I loved to read your journey, insight and philosophy. It's a pleasure to read and know of your takes on market and life.
MNC🏹 @Focus_SME
Check & follow @devinamehra's timeline for lots of post debunking such rosy stories. Also, she gives amazing 🤩 sector directions/hints.
KLN Murthy @KLNMurthy2016
Good actionable insights, great article!
Suresh Nair @gkumarsuresh
Devina Madam is simply terrific... good knowledge, straight and simple thinking.
Very difficult to emulate such traits. I listen her past interviews from youtube.
Respect...!!!!
DD @AliensDelight
One of the brightest minds in the world of finance :)
Radhakrishnan Chonat @RCxNair
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siddarthmohta @siddarthmohta
Excellent performance. Flexibility is the key as you have mentioned it earlier also. Cannot have finite rules for infinite mkt opportunities.
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To be honest, the insights which Devina madam brings in is very enriching..have learnt a lot from them...
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One of the most accurate analysts :)
I always look forward to you interviews mam
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Madam, It is always a treat to read your insight, not only on business but on other topics also!!
Dada.AI @dada_on_twit
Thanks for this wisdom ma'am. Always love hearing your thoughts on everything equity. :-)
adil @zinndadil
Excellent points!
Can clearly feel this thread is a product of marination of many books and years of experience. 👍
Kamal thakur @Kamalgt10
Superb !!
Your knowledge, analysis & articulation is simply great 👍
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Follower on Twitter and Subsciber on YouTube of First Global, really helping me in my investment desicion. Thanks
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