Gavin Baker
+ Your AuthorsArchive @GavinSBaker Managing Partner & CIO, Atreides Management LP. Formerly Fidelity OTC Fund. No investment advice, views my own. gavin-s-baker.com/ Jan. 26, 2021 1 min read

Hearing a lot of "fundamentals and valuation don't matter anymore - stocks can go anywhere."

I have heard this only a few times in my career.

Late 1999/early 2000.
Late 2008/early 2009.
March 2020.
January 2021.

Fundamentals and valuation always eventually matter.

For the sake of clarity: I do not believe the overall indices are in a bubble. Large cap valuations are generally reasonable.

There is, however, wild volatility in consumer and TMT smid caps that is not related to underlying fundamentals.

That is what I am referencing.

And given continued confusion, one often hears these sentiments near significant turning points.

i.e. Tops, bottoms and *really* powerful rotations that are violent underneath the surface of relatively placid indices.

This is why I usually do threads!


You can follow @GavinSBaker.



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