I want to thank everyone for the tremendous support you have shown me here on the ExponentialDave blog, on Twitter, and most recently on YouTube! You are heard loud and clear – people like the new video content but don’t want it to take away from my written monthly updates. No worries! I have zero intent on stopping with the monthly updates.
In the mean time, before my usual monthly update, I have had a somewhat active month where I’ve made a couple of YouTube videos approximately 7-8 minutes long. The first one was when I spoke at length about Amplitude. And just today, I have followed up with another video, this one detailing my thoughts on the latest growth stock meltdown, why it’s happening, and what I did in response to it (including options), among other things. It is available at this link here.
5 thoughts on “The Latest Growth Stock Meltdown”
I enjoyed your youtube video where you described your options leap strategy and I would like to know more about how you decide which option to buy. I buy leaps occasionally also but I buy them deep in the money because I hate paying for so much time value and I felt that the premium required to buy out of the money LEAPS was excessive. I am no kind of expert on this subject and would love to hear your thoughts on this in more detail
Hey @Royeston, thanks – glad you enjoyed the video. When I’m buying LEAPS I am focusing on the underlying business. Because I have strong confidence in SNOW, DDOG, etc that in a year or two the stock price is going to be 40%-100% higher, I know that these options will appreciate materially. For more insights on my options strategy, check out this post here: https://exponentialdave.com/2021/07/10/turbo-charging-results-with-options/
Dave really enjoy your video breakdowns. They are excellent and very helpful, not only the company info but the mindset info. Greatly appreciated! Great job
Thanks Mike – great to hear!
It is a privilege to be alive in a time like this, see how the world is changing, be really able to access information and draw own conclusions on matters, and know how easy life is for us compared to the countless generations before us (and yes, sometimes it may feel that it may be just a bit too easy). But before getting too philosophical about life, it is also a privilege as an individual investor to be able to follow great investors almost in real-time, hear their insights about companies, markets, and sentiments. Obviously you are one of those investors I consider very much worth following!
Few comments and one related question about your latest video, if I may. You mention “sector rotation” but I’m not sure would that be the term I’d use to explain the tumultuous events of the past week or two. At least in the traditional sense as sector rotation was used e.g. during the previous tech correction earlier this year. Spread of omicron variant and Fed QE tapering update with some inflation numbers, employment data, valuation concerns, and few other usual suspects thrown into the mix to spice things up. That perhaps more points towards wider market panic than just sector rotation. But this is mostly semantics and I fully agree on the impact (or lack of it) on the actual businesses, of course.
However, as valuation multiples start to compress – or even reset – I wouldn’t necessarily label that “market irrationality”. The market may actually have been irrational on the way up, not on the way down.Given the unprecedented amount of money added to the system during the past 18+ months it’s tempting to think we will see some sort of a larger reset to shake off the sentiment about overextended valuations regardless of the underlying SaaS foundation.
This brings me to my question, how concerned are you about a larger market correction or even crash these days? Do you ignore macro completely or do you agree that currently the risk for a larger correction might be somewhat elevated? Buying LEAPS of course is a pretty clear answer but I’m just wondering if or when or what would make you consider given thought to macro?
Thanks for sharing your insights!