Time To ‘Get Wet’: Morgan Stanley Says ‘Proper Rain Storm’ May Be Coming For Tech And Small Caps

For those in search of safe havens amid the ongoing escalations in the global trade conflict (Steve Mnuchin would really appreciate it if you didn't call it a "war", because that sounds bad, ok?), the Russell 2000 and the Nasdaq have been something of a safe harbor. Despite myriad stumbling blocks including a truly harrowing stretch in late March precipitated by acute regulatory concerns and exacerbated by Donald Trump's Twitter attacks on Amazon, tech continues to shoulder the burden when it c
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7 thoughts on “Time To ‘Get Wet’: Morgan Stanley Says ‘Proper Rain Storm’ May Be Coming For Tech And Small Caps

  1. I cannot accept that small caps are thrown into one basket. A small cap company exporting Trump blow up dolls to Europe and a small cap oil midstream company have nothing in common.

  2. H thank you for keeping us up to date with the lastest analyses. I think tech still has some juice left in it.

    However, time is running out (~0.5 to 1.5 years), when one looks at things from the global perpective…This is a perspective which you always present so well in all of your work. Thanks again….

  3. There where articles circulating today such as “Why Amazon is a value stock at the current price” or Why “Netflix is actually cheap” if calculated with the famous accounting ratio of price to subscription growth instead of earnings cash flow roi etc. In another interview i heard that tesla’s earnings and cash flow don’t matter bcs tesla trades at 5 years in the future. Then you have facebook, even the bulls don’t buy the BS of their business model, but continue to buy the stock nevertheless. Rain? Morgan Stanley is being conservative a fucking storm is coming.

    1. Exactly, I heard all this ‘traditional metrics don’t count for these growth companies’ bullshit back in 2000. When you hear analysts saying Netflix should be valued on subscription growth and not actual fucking profits then you know it’s bubble time. I mean Netflix at $420 do me a favour, it’s doubled since January.

      1. @Huw

        Ditto that. I remember the 1999-2000 era well. What a bloodbath that was. The brokers said all the right things.

        It was much worse back then, because many of the young companies in the tech mutual funds went completely bankrupt. That’s a 0. No hope of ever getting that money back. At least many of the FANG stocks will recover in a decade or so, after the cleaning.

  4. The article is speaking about the Russell 2000 small cap index. IWM as an ETF, RUT as a cash index. Yes your two company example: both would be within this article’s index being Russell 2000.

  5. When looking at the volume for dow, s&p & nasdaq futures,..do you get the feeling that not everyone is coming to this party?

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