2022 has been terrible for equity holders. The DJIA down 15%; S&P down 18%. After the longest bull run in stock history, the bears are taking over. And no stocks have been hit harder than growth stocks. Does that mean our mantra of “grow, grow, grow” was wrong – or is now out of date?
This podcast explains why events unrelated to company performance are driving down growth company valuations. From demographics (aging people who want to lock-in gains,) to untaxed investment companies focused on quarterly performance, to fears of inflation, recession and never-ending wars there look to be ample reasons why investors sell.
But the long-term trends have not changed. Listen and be reminded that you still want to be mobile, connected to friends and co-workers, entertained at your leisure, working and shopping from home – all trends that will drive growing demand for the growth companies we have admired and held up as role models. You should avoid knee-jerk reactions to higher commodity prices and realize that long-term the value always goes to those who deliver on trends. That’s why Spark Partners is still betting on the growth companies – from Apple to Amazon, Alphabet to Meta and Netflix – while eschewing off-trend current darlings like Exxon and ADM