The age-old strategy of buying cheap shares is faltering
By many measures tech stocks have not been this overvalued since 1999. Similar situation. COVID + staying at home + government stimulus means there's a lot of money sloshing around. Tech companies are relatively unaffected by pandemic so all this money ends up there.Lots of general public getting in on the market just like 99. Senseless valuations on companies without a dollar of revenue. A historic year for tech stocks right after a historically long bull run, just like 99. Many allegations of fraud since money is so easy to get. Tech stocks make up something crazy like 30% of value in market, again just like 99.If tech isn't in a bubble, I don't know what's going on. How does virtually every tech company become twice as valuable in 6 months? They don't.Unlike last time, most of these companies won't crash to zero. But they could easily lose 2/3 of the value as soon as life goes back to normal and everyone sees how much damage corona has done. The relatively fast early recovery has the markets in a state of euphoria.I moved all my money to "value" stocks last week. These tech valuations defy all logic. Remember when Buffet said to be fearful when others are greedy? Well right now he's investing out in Japan