Somebody talked to me the other day like it was 2008.
I’m not trying to be mean, but what is wrong with you, man? If you’ve been in this business 10, 15, 20, 30 years, have you ever heard more people cry out in pain over absolutely nothing? I can’t even believe it.
Look at the S&P 500. From where it’s trading to the top tick in the marketplace, it’s not even 3%. Last week, it finished mildly lower, and this morning it got right back to where it was at the start of last week.
It’s not even a dent, not even a ding. If Friday’s drop had taken four or five days instead of one big ugly down day, nobody would even be having this discussion.
Some Stocks Are Getting Killed While The Index Sits Still
Now, I’m not saying nothing’s getting hurt. A lot of individual stocks are getting absolutely killed, some of them at five-year lows, even 10-year lows. Nike got decimated.
Then there’s Oracle.
This morning, it filed to sell new stock as part of a roughly $20 billion raise, half in stock and half in bonds, to fund its AI ambitions. What’s $10 billion amongst friends? But if Oracle is a sign of AI, you’re in trouble.
And the chip stocks that got hammered on Friday aren’t bouncing. The stocks catching a bid this morning are the ones that weren’t getting decimated in the first place.
Why The S&P Hasn’t Felt It Yet
So why does the S&P look fine? Because it’s owned by the biggest companies, the Nvidias of the world and Microsoft, and Microsoft is a stone’s throw from its all-time high.
For the whole market to come down, those giants are going to have to take a hit. That hasn’t happened. Damage to the overall marketplace hasn’t even begun.
The reaction itself doesn’t worry me. What worries me is the complete and total inability of so many people to manage through their positions.
Do This Tonight Before The Giants Crack
If a market that’s barely 3% off its high has you this rattled, you need to take some action. That can mean hedging, or it can mean exiting a portion of your portfolio. This isn’t about bailing out of everything. Whatever you do, don’t do nothing.
Go through your positions tonight and pick the one that would keep you up at night if the giants finally take that hit. Hedge it or trim it now, while the index is still sitting near its high.
To your success,
Don Kaufman
P.S. Apple and Palantir both report after the bell tonight. The options are pricing about a $16 to $17 move in Apple, which is bigger than normal, and $23 to $24 in Palantir, which is a big move.
