Monday, November 21, 2022
HomeWealth ManagementIf you don’t cut your losses, they’ll cut you, says CG portfolio...

If you don’t cut your losses, they’ll cut you, says CG portfolio manager

“I did trip off a lot of gains, which gave me a reason to sell those stocks,” he says. “But more importantly, I didn’t think fundamentally that I should stay in those names. I believe the sector is going to remain out of favour for an extended period of time.”

The struggles in the tech sector this year have been well-reported through headlines around missed earnings, mass layoffs, and public apologies from CEOs of once high-flying firms. Despite the dour mood around technology, some are standing by the space, believing that today’s beaten-down prices may represent bargain opportunities for the future.

But the world is set to enter an era of higher inflation, and rising interest rates are taking a bite out of the future earnings of growth firms. Against that backdrop, Klein thinks the days of mega-cap tech leadership in the stock market may be numbered, and that there’s still a lot of excess money to be squeezed from some of the largest tech names.

“I think the baton has to be passed on. It’s a value environment, but I don’t know if the world’s positioned for value just yet,” he says. “I think money is rotating, so I’m positioning my portfolio for more of a value-oriented tilt.”

Just as there’s no perfect way to time a market bottom, Klein expects the decline of tech will not be straightforward. He recalls how the NASDAQ declined from its March 2000 peak for several months, then went through a relief rally only to later descend even further.



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