SPEAKER_00 0:06

Hello, welcome everybody to the podcast. Today we're going to talk about our tech stocks in trouble. And we're going to get into some numbers here, which aren't overly surprising. But before we do, um, I want to just mention really quickly uh the video. It's a video pod as well as a pod you can obviously just listen to in your car or wherever you normally listen to podcasts. So you can get the video on Spotify, obviously YouTube, but also, and this is why I bring it up, um, your Apple Podcast. So if you open your Apple, most people are listening on Apple, we've noticed, um, you'll see a little icon that says video. You click video, you can watch the video on your on your phone, on your tablet, wherever. So that's new. Apple's new in that uh, you know, video podcasting space. And um I gotta give credit to producer Jamie. She got us on there. We're one of the first podcasts on there, so it's pretty cool. Um check out the video. We're gonna add, uh, not today, but we're gonna add some screen sharing, uh, walking through, you know, some real nitty-gritty numbers in the future. We're gonna get into things that I think you're gonna want to see on the screen. So just kind of check that out when you get a chance. Um, but today, today we're gonna focus on tech stocks. Now, look, this is kind of an interesting thing. We're gonna we're gonna talk a little bit more than just tech, but we're gonna focus on tech. Um, this year, as we've done in in we did a podcast on midterms, you know, it's a midterm election year. We talked a lot about how there's usually an intra-year decline, but it's a quick bounce back. So don't be worried about midterm elections. Um, we also had obviously the uh the war with Iran kick off earlier this year. We we jumped right out and got ahead of that and talked about that as well. Interestingly, though, the markets are, I mean, look, markets are resilient uh and they are so resilient this year. We're having another phenomenal year in markets around the globe, but tech stocks. Now, a lot of my clients have reached out over the you know past several years and they've had they've had companies like um, gosh, even Rivian, you know, I wouldn't necessarily call it tech, it's more automotive, but techy, uh, Palantir, Nvidia, obviously. Um there's always kind of the new thing out there where people are like, oh my gosh, why didn't why didn't we buy that? In fact, we even did a podcast um saying, you know, why didn't you buy NVIDIA 10 years ago? Um and this isn't gonna surprise any of you. Look, we don't we don't do individual stocks here. We really view that as just speculation and gambling because we just don't know where these things are gonna go and when they're gonna go there. No stock goes up indefinitely, it's just the way it is. I don't care who you are, your stock's not gonna just go up indefinitely. And honestly, no companies last forever. It's almost impossible to think of a company like Apple or any of them, any big company actually going out of business, but these things happen. It could take 10 years, it could take 100 years, but you know, companies don't exist forever. So let's get into some of these tech things. I think you're gonna be surprised by some of these numbers and some of these names. And now, what I did was I went in and we're sourcing all this, like we usually do, from Yahoo! Finance, they're just the easiest way to go get these up-to-date numbers. And these numbers are accurate through um the end of June. Uh, we're recording today on July 3rd. Happy Fourth of July to everybody. You're gonna hear this probably on Monday. Um, but um uh yeah, so these numbers are all up to date. Now, what we did is we went and looked at the the high. So there are record highs in a lot of these companies, is which is where people got get all excited about it, right? Like, oh my gosh, we're missing out. We're it's fear of missing out, kind of like on IPOs, like we did on the last podcast with SpaceX. Um, FOMO will kill you. It will kill you in investing. Uh, speculation is not investing, two totally different things. So I went and I looked at um 17 to 20 big companies from their all-time highs and where they stand at the end of June. And what are those rate of returns? In other words, what are the drawdowns from the high? These numbers, I mean, they I had to double check a lot of them because they shocked me. This one didn't shock me. Coinbase. Um, really, none of you guys have been asking me about Coinbase, but that's down almost 70% from its all-time high. Oracle is down 57%. So I'm just gonna read a couple of these off and then we'll kind of comment on it. Salesforce is down 57%, 5-7. Um, even ServiceNow, many of you may not know that, but my West Coast clients do. Um, you know, they they are very familiar with uh Salesforce. I'm sorry, for ServiceNow. That's down 56%. Netflix is off 48%. Palantir, this is one of them. This is one of them you guys were asking me about last year. Why aren't we in Palantir? By the way, we are in Palantir. We just don't own individual positions in it in your portfolio because we don't do individual positions in your portfolio. And this is why Palantir is down 50% from its all-time high. Now, that's not just a bear, I mean, these aren't just bear numbers. These are these are catastrophic numbers if you if you went and bought them close to their all-time highs. Microsoft is down 37%, Meta, that's Facebook, down 32%. Um, let's see here. Nvidia down 19%, Amazon down 19%, Google down 17%, Apple down 14%. So, like these are SP 500 stocks. Okay, all of those companies I just mentioned to you, which they ranged down, I think the best of the performers was Apple down 14. Um, Oracle is down 57%. Again, those are SP 500 stocks. Well, okay, so how is the SP doing this year? And this is really kind of the whole point, right? So I know it's easy for everybody, and and even me as an advisor, like we get caught up in in what's new and this time is different. And and we are gonna do another podcast on on picking your advisor is extremely important because if the advisor, I'm pointing to me, if the advisor is the weak link in your strategy, if the advisor lets you play in these areas and speculate with your money, I mean, you have no shot. You have no shot. The advisor is the is the the point of an advisor, at least on the investment side. We're not talking about planning because there's a lot more that goes on beyond just the investment management. Um, but on the investment side, if you don't have an advisor who can literally look you in the eye and say, we're not doing that. Like we're just not doing that, just like I would to my child, you know, who says, I want to jump off a 40-foot cliff, the answer is no, we're not doing that. I'm willing for the child to be angry at me and stomp off into the room, but we're not doing that. If the advisor can't look at you and say, look, we're not gonna go buy an IPO, we're not gonna go buy these individual positions like Palantir, Apple, whoever, Rivian, doesn't matter, NVIDIA, we're not doing that. Um, you know, if they're not willing to risk making you upset and maybe honestly even losing you as a client, which is the last thing I want to do, but I'm not gonna let you harm yourself. And this is what happens. So all of those stocks, which ranged again from, I don't know, 50 some odd percent negative, um, to I think Apple was down 14%, they're in the SP. So how is the SP done this year? Well, the SP year two date is up nine percent. So, I mean, it's just an argument for diversification. Now, you guys know that we're not SP only, you know, we're not we're not buy the SP and chill advisors here. That's not what we do. We have you in markets all around the globe. So I'm gonna tell you kind of where we're at almost midway through the year here. But just understand that those stocks, those huge stocks, which by the way, make up a very large percentage of the SP 500, and just in terms of their weighting, those stocks are are down significantly from their all-time highs, but yet the SP is still up this year, 9%. How are we doing in some of your other holdings? So if you're a client of mine, you'll know that uh a big uh you know tilt that we look at is small companies and also value companies, of course. We talk about it ad nauseum. U.S. small cap value uh markets this year are up about 16%. I'm rounding, you know, 16.41. We're gonna call that 16%. Um, we also uh actually, if you're in a if you're in an aggressive portfolio, uh say a 95% equity position, um, the largest slice of your portfolio is actually in international small cap value. So that's international small distressed companies, is really what that is. And we're not timing it, we just we're looking for risk premiums and how they've existed over time, and that's the the largest piece of the pie uh in our model portfolios. And so that's up about six percent year to date. Now that's on the back of last year, it was up over 50%, right? So you you know you're not gonna get 50, 50, 50. Of course, it would be beautiful if we could. Um, just some other markets here, uh, US small growth, so not distressed companies, but growth companies, that's up over 19% year to date. And we can just keep going down the list here. Markets are doing phenomenally well. Um, so this always kind of underscores the point, and that's why I wanted to talk about you know, is tech in trouble? I don't, I don't know. You don't know, I don't know. Nobody knows. The analysts don't know. The um least of all the talking heads on TV, they don't know, the radio talk show hosts don't know. Trust me, your brother-in-law has no idea, your father-in-law doesn't know. Nobody knows. We don't know the future. I do know that in early in my career, we've talked about it on this pod before, from 2000 through 2002, the SP lost 50% of its value. The NASDAQ lost 75% of its value. The NASDAQ took between 12 and 15 years just to break even. So we have seen tech deliver phenomenal returns and then get crushed before. You know, I don't, I don't know where we are right now. Um, I don't subscribe to the this time is different theory just because it's AI this time versus internet last time. You know, but look, tech stocks could rebound, all those companies we just mentioned, they could rebound and they could rocket to new all-time highs and and and you're gonna want them again. My guess is most of you didn't even know that those tech stocks were off as much as they were. You know, those numbers are scary for some of those companies. I mean, Apple being off 14%, you know, from its all-time high, not the end of the world, but you look at some of those other companies, and we we had companies like Cisco and, you know, down 50 plus percent from their high, that's I mean, those numbers are that can take a decade plus to recover, right? So is that where tech stocks are heading? I have no idea. The good news is I don't want to say we don't care, but we don't care, right? We're not doing that. We're not we're not overweighting to um a sector. That's not what we do at all. In fact, even in the areas we do overweight, which aren't sectors but markets, and we say we overweight as an example for small growth companies. Let's just say that. You know, we we we have more small growth stocks in your portfolio than we do uh large growth stocks in your portfolio. Even in that one little slice of it, we're not picking winners and losers in there because we can't, because we don't know the future. What we're simply doing is we're saying, look, we want to have smaller companies, and even in the small company area, we want the smallest of those companies. This is just all repetition, right? Just kind of getting it into your brain again and just so you can hear it. Um, obviously, we keep adding new clients, and so we want to put this stuff out there so that they can hear it as well. Also, I mean, look, I I'm not objective here. Um, you know, our point is to help as many uh clients as we can and investors as we can. But my guess is a lot of the people that you know, you know, your family, your friends, your acquaintances, the people that you maybe work with, you know, you look, you guys talk about money. We know that. You don't get maybe in depth on it, but people talk about it. My guess is they're like a lot of the people that come to us and they're very overweighted right now in SP and tech kind of stuff. It could work out phenomenally well forever, or they could lose 50 to 75% of their value. So just share it. Just shoot this over to them and be like, hey, this guy's got an interesting take on it. Just give him, just give him a listen. Uh that's all for our podcast today. I hope you guys all had a great 4th of July. Um, don't be worried about tech stocks because the good news is it does not really matter for you. You're well allocated across different markets and different portfolios across the world. And we will see you again in a couple weeks.

SPEAKER_01 12:13

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SPEAKER_00 12:50

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