Gavin Baker
+ Your AuthorsArchive @GavinSBaker Managing Partner & CIO, Atreides Management LP. Formerly Fidelity OTC Fund. No investment advice, views my own. 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.


Tip: mention @threader_app on a Twitter thread with the keyword “compile” to get a link to it.

Enjoy Threader? Sign up.

Since you’re here...

... we’re asking visitors like you to make a contribution to support this independent project. In these uncertain times, access to information is vital. Threader gets 1,000,000+ visits a month and our iOS Twitter client was featured as an App of the Day by Apple. Your financial support will help two developers to keep working on this app. Everyone’s contribution, big or small, is so valuable. Support Threader by becoming premium or by donating on PayPal. Thank you.

Follow Threader